Bank Account Savings: High Interest Savings Accounts

In UK, at least 9 in 10 people have a bank account but the rates are very low – just 0.5 per cent on instant accounts. Low rates turn away money savers. The last years saving report of Britain claim the saving ratio dipped to record low in 2017 -2018 – which shows people are spending more instead of keeping money for future. People are supporting their spending though more debt, whereas, such a low saving can be hazardous to the economy. Experts claim this kind of saving habit is not sustainable. The main reason for low saving is that people are not aware where to invest, or they do not know - what is the safest ways of saving?

Although, regular bank accounts give some of the lowest rates of return, it provides a platform to keep money for future spending.  People trust bank savings as it is a no-risk saving and account holders can gain decent amount from years of savings. Many savers are unaware of the benefits of keeping money in such accounts- which can work as emergency fund and get rid of existing debt.  It is mostly advised to save up to 10 per cent of the earnings into such accounts –depending on how much you spend and what amount will be able to meet your future requirement.  One can get insurance and certification of such savings and there is no minimum fee or legalities involved in it. This is one of the simplest methods to save for future –where you can withdraw, when required, for big purchases like for a house.

High interest vs. regular bank accounts

The rates of bank savings have reduced in the past few years and people do not feel rewarded for investing in long term accounts.  Putting money in saving banks is not giving lucrative returns and there are supplementary provisions to gain instant money such as cash ISA – hence, people may not invest in such accounts. Stocks, mutual funds, bonds and other financial investment have various risks. Shares offers some of the highest returns on investment as compared to other forms of cash investment but many prefer long / short term risk free investment over risky shares.

Some fixed-term bank accounts can give returns up to 5 per cent, where, there can be restrictions on the amount of money deposited into such accounts. Changing the bank account, sometimes, increases the rates and one can earn more in a year by shifting the account to other bank.   Provisions for saving at a higher rate in banks such as Ally Financial where the deposit of US $10,000 could yield up to US $100 as interest in a year, is offered online. Online banks are unusual banks that offer easy access to your account. Investment in high yield saving account provides some of the highest rates as compared to traditional savings, although, there are many restrictions and decisive factors to keep money in such account - such as restrictions on saving amount and minimum balance.  Such savings can be made in online banks - Synchrony and Barclays that offer such savings.

To know more about High Interest Savings Accounts, click Asset Class Pedia – (https://assetclasspedia.com/).