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Is a regular savings account for you?Also known as ‘monthly savers’ or ‘regular savers’, a regular savings account might be for you if:
How regular savings accounts workDifferent accounts work in different ways, but with most banks and building societies:
Risk and return of regular savings accountsAt the end of the term, you’ll get back all the money you’ve paid into the account plus the accrued interest. These accounts usually offer higher interest rates than current or instant access accounts. Some offer a fixed interest rate. With others, the rate is variable. The interest rate might be reduced if you don’t save every month or if you need to make a withdrawal. Access to your moneyRules vary between accounts. Some allow you to take money out but might give you a lower interest rate for that month or for the remainder of the term. Other accounts don’t allow any early withdrawals. It’s important to check the rules carefully before choosing a regular savings account if you think you might need to access your money during the term. How safe are my savings?Cash you put into UK authorised banks, building societies, or credit unions is protected by the Financial Services Compensation Scheme (FSCS). The FSCS savings protection limit is £85,000 (or £170,000 for joint accounts) per authorised firm. It is worth noting that some banking brands are part of the same authorised firm. If you have more than the limit within the same bank, or authorised firm, it’s a good idea to move the excess to make sure your money is protected. How to get a regular savings accountYou’ll need to contact a bank, building society or credit union directly. Some accounts are only available online. While others, especially some building society accounts, are available only through branches. If you want a bank regular savings account and don’t have a current account with that bank, you’ll probably need to set one up. If you don’t already have any accounts with the bank or building society you choose, you’ll need to show them ID and proof of your address. You might also need to show these if it has been a long time since you opened any existing account. Tax on your savingsThe personal savings allowance means:
There is also zero-tax band on the first £5,000 of savings interest. This means that anyone with a total income including any savings interest of less than £18,570 in 2022-23 (as long as your personal allowance is the standard £12,570) won’t pay tax on their savings.
If things go wrongUK banks, building societies, and credit unions are regulated by both the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA). If you have a complaint you should give the business a chance to sort things out. If you’re still unhappy or the issue hasn’t been resolved you can take your complaint to the Financial Ombudsman Service. Finding a regular savings accountComparison websites are a good starting point for anyone trying to find a savings account tailored to their needs. Comparison websites won’t all give you the same results, so it might be a good idea to use more than one site before deciding. It’s also important to do some research into the type of product and features you need before making a purchase or changing provider. Was this information useful? Thank you for your feedback. We’re always trying to improve our website and services, and your feedback helps us understand how we’re doing. Share this with Copy this link Looking for us? Now, we’re MoneyHelper MoneyHelper is the new, easy way to get clear, free, impartial help for all your money and pension choices. Whatever your circumstances or plans, move forward with MoneyHelper. Continue to website Do not show this message again for Money Advice Service Looking for us? Now, we’re MoneyHelper MoneyHelper is the new, easy way to get clear, free, impartial help for all your money and pension choices. Whatever your circumstances or plans, move forward with MoneyHelper. Continue to website Do not show this message again for The Pensions Advisory Service Looking for us? Now, we’re MoneyHelper MoneyHelper is the new, easy way to get clear, free, impartial help for all your money and pension choices. Whatever your circumstances or plans, move forward with MoneyHelper. Continue to website Do not show this message again for Pension Wise Can you regularly add money to a savings account?A savings account can give you peace of mind because the money you save will be safe, and it can help you cover unexpected expenses. To get the maximum benefit from a savings account, you can add funds to it regularly.
Can you add regularly to an online savings account?Saving money on a routine basis can be a difficult habit to form, but it doesn't have to be. One of the benefits of an online savings account is that you can take your willpower out of the equation by setting up weekly or monthly automatic deposits from your checking account into your online savings account.
How does a traditional saving account work?A traditional savings account is, fundamentally, a place to hold your money. It's an account you typically open along with a checking account, but one that you don't want to spend from on a regular basis. That means it's not for shopping or automatic bill payments.
What are the cons of a traditional savings account?Three disadvantages of savings accounts are minimum balance requirements, lower interest rates than other accounts/investments, and federal limits on saving withdrawal. If you're fortunate enough to have extra money for long-term goals, first, pat yourself on the back!
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