Savings Accounts as the name suggests need you to put your regular savings in the form of money away each month. You, of course, get the yearly interest paid on this money, which is in your account. Here, even though the terms and conditions are somewhat rigid, but the advantage is that you get higher interest rates as compared to traditional fixed or easy-access savings accounts. Some rigid conditions that you need to follow are – restriction on the number of withdrawals, the requirement for you to make monthly deposits, etc.
The requirement to make a monthly deposit
The majority of the accounts are extremely strict about the users’ requirement to put away certain amounts each month. If users fail to follow this requirement, there are chances that they will lose their interest or their account will be closed.
Although, if you are a regular saver there are chances that it won’t matter much if you skip your payments once or twice, however, you should still try to avoid it, as there are huge chances that you might lose your interest.
If you are a regular saver who is finding it difficult to make a normal payment, it is best to contact your provider and ask them for help with the options for you.
The headline rats e typically only for a year
The majority of the regular savers have a one-year term. After this, you start getting very little. Therefore, it is best to look for better options when your regular saver ends.
If your interest rates change after one year, it is best to make a switch.
You can open more than one account
If you save more, then you can easily opt for more than one regular saver. Although you can have only one regular saver with one provider, you can definitely go with a different provider, if you are looking to go for more than one regular saver.
You will earn around half the headline interest rate
The interest that you get will be around half the interest rate of the account. However, it is not a fraud but it is all about the money being saved monthly rather than in one lump sum.
Up to £85,000 per person is protected in UK
The protection is the same as you get with normal savings. Financial Services Compensation Scheme (FSCS) protects your money if it is in a UK-regulated bank or building society account. The point is that the first £85,000 per person, per financial institution, is protected.
Children can earn 4%
If you are a parent to a child who is under 16 years of age, you can get 4% AER fixed for a year with the Halifax kids’ regular saver. Nevertheless, withdrawals are restricted, and you are able to save only between £10 and £100 a month.