Monday, November 5, 2012

Instant Access Savings Accounts – A Better Way to Manage Your Savings

If you are living in Britain, it won't take you long to appreciate the fact that money slips out of your pocket earlier than you can imagine. Expenses from all corners seem to be attacking and making you cough up your hard-earned money. No wonder that the Pound seems to be a Monopoly currency. Fortunately, there are savings accounts to help people to save some money for their future. However, you should be very careful in choosing your savings account and take the following factors very seriously for the purpose. 

Interest Rates:

Whenever selecting a bank for a savings account, the first thing you should look to is the interest rate. There is simply no use of opening a bank account which does not offer handsome interest on your savings. 

Withdrawal Process:

Most banks won't let you simply withdraw money from your savings account. In fact, this is what savings account for: They keep you from instantly accessing your money. Many banks also impose penalty on each withdrawal. However, some banks also offer instant access saving accounts. Basically, these are savings accounts that do not impose any penalty on withdrawal. Instant access savings accounts could be either online or otherwise. The online ones could take relatively longer to process withdrawals.

However, some instant access savings accounts offer only a limited number of penalty-free withdrawals. 

Initial Deposit and Minimum Amount Required for Account Maintenance:

Different banks have different requirements for opening savings accounts. Some ask you to deposit at least a specified amount, which is in some cases a huge amount, whereas others may ask you to make sure that there is always a specified amount available in your account. Since banks differ remarkably on this front, you may choose from a wide range of options on your initial deposit amount and minimum maintenance amount. But you should note that most banks offer higher interest rates against accounts which require a reasonable initial deposit and minimum maintenance amount. You shall have to balance interest rates against the amount you can easily put in your savings account. 

Is There Any Bonus? 

Some banks offer bonus interest on their savings account. The result of this is that you get a decent amount of extra money in form of these bonuses. The effect of these bonus-interest awards becomes more noticeable after compounding over years. 

Is There Any Complicated Documentation Required?

Most banks have simplified their account-opening procedures and have done away with the need for any complicated documentation procedure. However, there are some banks that still require you to fill in a good number of forms for opening an account. You need to understand that it is now obsolete to treat the future clients as the clerks in your office. Therefore, there is nothing extraordinary if your bank asks you to tell them just a few details and they shall have your account opened. In fact, this is how most online bank accounts work. All you need to do to open these is to provide just a few details and that’s it.

To conclude, choosing the right savings account is one of the most important decisions for you to make. If you make a mistake at this front, you shall put yourself in a position where you will keep losing interest money over your savings. Therefore, be most careful when choosing a bank to open your savings account with!

Denzel Zurich studies microeconomics and helps people to make better choices to save and spend their money. He has also written on the utility of instant access savings accounts.

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