You might want a new car, a computer, or money for college. Whatever it is your probably looking for a saving account. I hope the following article will help you decide which kind of savings account you require.
Savings accounts are normally quite simple. You would open one, put your money in it, and earn interest on your balance.
Money market accounts work in almost the same way but tend to have higher rates of return but also require higher balances to earn interest.
Many savings accounts offer introduction interest rates that are higher than their standard rates. Once the introduction period (usually a few months) is over, your interest rate may increase or decrease depending on your balance. Obviously, the more money you have, the more money you can save. Most savings account providers offer interest rates that can be compounded daily, monthly, quarterly, yearly, or all of the above. Compounded interest is interest earned from the initial deposit you made to the account and interest accrued. The more frequently your interest is compounded, the more your savings will grow. Most rates are compounded either daily or monthly, and again at the end of the year. For example, if you deposited £500 with a 5% monthly compounded interest rate, you would have £525 by the month’s end. The interest continues to grow as it is compounded regularly and at the end of the year.
Once the savings account is open, many banks require a minimum balance to be maintained in order to earn interest or avoid the service charge. These can range anywhere from £0.00 to £100,000.
N.b. Individual circumstances vary and these articles only provided for illustrative purposes. I recommend you see a bank assistant or a financial advisor if you need help with your finances.
