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Savings AccountsSavings accounts can be obtained from a variety of organisations, including banks, building societies and even supermarkets. Every company offers different reasons why you should invest, with different savings schemes and accounts, each with different pro's and con's. It is therefore essential that the customer decides which account best suits their needs. Some may offer competitive interest rates whilst others offer bonuses or free gifts. For example, if a customer prefers a more personal organisation, where they can speak to a customer advisor or use counter services, a high street bank or building society may be more appropriate than an online savings account. However, if the customer wants to be able to easily transfer money, view statements, pay bills and does not require counter services then an online savings account would be ideal. Within these organisations there are also many different types of savings accounts to choose from. These include Instant Access/No Notice, Notice, Mini and Maxi Cash ISAs, Child Savings Accounts and Online Accounts. The following summarises each savings account individually. Instant Access This type of account enables the customer to invest as much money as they wish, with the knowledge that they can have immediate access to their money should they require it and without penalty. The disadvantage is that the interest rates tend to be lower than other types of savings accounts. The ability to withdraw funds easily makes it more difficult to save consistently. This account should therefore be considered a short term savings account. Notice Account This usually provides a reasonable rate of interest which goes up in correllation to the amount of money saved. This account is generally used for long term saving, as the savings cannot be immediately withdrawn. Some banks require up to 3 months notice to be able to withdraw funds without incurring a penalty. This is good for customers who want to save for the future, for example retirement or child education, as the account can remain untouched. Individual Savings Accounts (ISAs) Available to anyone who is a British Citizen over the age of 16. They involve investing cash or stocks and shares (or a combination of both) of an amount up to £3000 per year. The interest rate is often higher than regular savings accounts and is tax free which is the big selling point. The account is also instantly accessible and can therefore be used for long or short term investing. Online banking is fast becoming the most popular and effective ways to manage your finances. Online Savings Accounts offer a higher interest rate than high street banks, because they have less overheads. All aspects of traditional banking can be carried out online, dramatically reducing the amount of time spent in queues or on the telephone. If you are looking for a loan then we recommend that you visit Loans UK. |
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