Should You Open a High Interest Savings Account?

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Want to earn high interest along with the flexibility to access your money anytime you like? A high interest account can be a great choice in the UK. Check out what this account is and whether you should open one.

A savings account is one of the best ways to deposit money for your everyday expenses. Your deposit earns percentage-based interest, and you get the flexibility to access your money anytime you like. But what if you get the same flexibility but with a higher rate of interest?

Some of the top banks in the UK have now introduced high-interest savings accounts to help the depositors earn interest as high as 0.50% AER. Check out some of the top features of these accounts-

1. Low Minimum Balance

If you already have a savings account in the UK, you might know that you are required to maintain your balance above the minimum limit of the bank to earn interest. This minimum balance varies between banks.

Some banks offering high interest accounts in the UK let you open this account with as little as £1. This ensures that any amount above £1 will earn interest and help you earn additional income on your savings.

2. Monthly Interest Payments

Unlike many other investment options, you do not have to wait for any maturity to receive your interest income with high interest accounts. Based on the balance you maintain in the account, the bank will deposit your interest income on a monthly basis.

You are free to deposit and withdraw money as many times you like in your account, and the bank will consider the closing balance on a daily basis for calculating your monthly interest income.

3. Zero Withdrawal Penalty

There is often a penalty associated with withdrawing your money before maturity with most investment options. But with a high interest bank account, you can withdraw your money as many times you like without worrying about any penalties.

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Be it managing your monthly expenses or funding a financial emergency, you can easily withdraw funds from your account without ever paying any penalty.

4. Regular Savings Plan

You are required to link a current account with the high interest savings account for depositing and withdrawing money. Some banks also offer the option to set up a regular savings plan. With this facility, you can select a fixed amount that would be automatically deposited into the high interest account from your linked current account every month.

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If you are aiming for disciplined saving, high interest account can help you in this endeavor while also helping you earn more on your savings.

Who Should Open a High Interest Savings Account?

A high interest bank account is an excellent choice for anyone wanting to earn extra income on their ideal funds. A lot of people in the UK now deposit their monthly expenses in these accounts so that the amount can earn a higher rate of interest. They then withdraw and use the money as and when required.

Even if you are aiming to add more discipline to your savings, the regular savings plan available with these accounts can definitely help. Look for a top bank offering a competitive rate of interest on high interest accounts to apply for one as soon as possible.

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