Types of Savings Account
There are several types of great savings accounts that savings institutions offer that provide higher interest returns on savings that are based upon the saver investing a fixed sum for a set period of time, on a fixed interest period subject to conditions or upon the saver investing a minimum regular amount into the account. The first of these that we will consider comes within the latter category and is most frequently described as a Regular Saver Account
The Regular Saver Account
In simple terms, the Regular saver account is one into which the saver agrees to invest cash into the account on a periodic basis (conventionally this is monthly). Because the savings institution can rely upon receipt of cash on such a regular
However, savers are likely to find that the easy access accounts
that provide the most attractive interest rates are those that do
not require an office or branch based organisation of the account.
Accounts that can be run by telephone or, even more likely to Regular Saver Account rewards investors who are prepared to pay an amount of money
on a periodic basis (usually one month) into their savings account. Because the savings institution is able to operate on the basis that a fixed sum will be received it can provide what are, on occasion, some extremely attractive interest rates. However, there are certain conditions that apply to these accounts. Firstly, because the interest rates offered can be so attractive, there will be an upper
limit on the amount that can be invested. If that upper limit is
breached, it is likely that there will be interest penalties
imposed, resulting in a much reduced interest return.
Equally, it is likely that there will be a limit on the number of withdrawals that the saver is permitted to make in a year. Once again, transgression against that condition is likely to result in penalties against the saver's interest return.
Nevertheless, for savers making only relatively small investments,
who are able to see their cash tied up for a period, the Easy Saver
can be a profitable option. The next type of savings account that we will
consider is one where the rate of interest is higher than the
standard current account or easy access account but where there are
additional conditions affecting your access to your money. This is
the Notice Account.
The Notice Account
In basic terms, the notice savings account is one where the saving institution offers a higher rate of interest in return for a condition on the account that requires the saver to give a minimum period of notice
before making any withdrawal from the account.
The notice account is not appropriate if there is a possibility that
you will require all or part of the funds urgently, or at least
within the notice period applicable to the account. However, if you
are able to have your cash tied up for the minimum notice period you
can benefit from some enhanced interest rates.
It should be said that savers can still obtain access to their funds
within the notice period if they urgently require them. However, in
such circumstances the saving institution is likely to levy some
quite Draconian charges.
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