Getting to Know a Savings Account – A Detailed Guide
Saving money is among some of the most important aspects of life. It may be easier when you are unmarried and young, but as you grow older, every other step of life starts demanding more money. Raising a child, paying for their tuition, buying a house, and retirement, all major decisions require money. Unless you have any saved up, it is very difficult to manage through these stages of life.
This is where a saving account comes in. These accounts help you save money as well as earn from them to accumulate a greater amount.
These are deposit accounts which allow you to deposit a certain sum in them while sealing them from withdrawal for a particular period of time. Normally, the withdrawal is barred for a few years while you keep earning interest over your deposited amount.
However, you can still withdraw your money from these accounts in case of an emergency, but it requires paying a penalty charge. On the other hand, you can always deposit additional amounts in your savings account.
There are several different financial institutions with whom you can open a savings account. These financial institutions include Credit Unions, Mutual Saving Banks, Commercial Banks, and Savings and Loan Associations.
Special Savings Account
In the United Kingdom, there is a Special Savings Account which acts as a normal savings account, but allows you to make a transaction if the authority is informed ninety days before the date of transaction. They are great for people who want to withdraw a certain amount of money every few months for things like semi-annual tuition fee.
Apart from the withdrawal, there are several other restrictions over a savings account. To start off, you are not allowed to do more than six transfers from your account per month, otherwise you have to pay extra fee. However, you are allowed to change a savings account into a current account in case you are willing to perform more transactions with the same account over time.
Features of Savings Accounts
There are several features of a Savings account that consumers must know about. Some of them are:
- You cannot withdraw money regularly from it unless you pay expensive charges.
- The longer the period of a savings account, the higher will be its interest rate.
- These accounts have some of the highest interest rates to offer.
- Certain savings accounts in the UK even allow you to conduct regular transactions. However, these transactions are limited as compared to the freedom you get with current accounts.
- The minimum and maximum balances of different savings accounts vary from each other.
Types of Savings Accounts
There are a lot of different types of savings accounts in the United Kingdom. Following are some of the best ones for you to opt from.
- Regular Saving Account
- E-Saver Account
- Instant Saver Account
- Champion Saver
- Everyday Saver
- Easy saver
Opting for a savings account is one of the best ways to save up for your future. It is easy to handle and allows you the mental satisfaction of having firm financial support in life.