What is High-Interest Savings Account in the UK? 5 Things to Knowby Malini Mathew Writer
Most of the NRIs working in the UK open a savings bank account for depositing their savings. The account allows them to access their funds anytime they like and also enables them to earn interest on the balance they maintain in the account. To help the customers earn more on their savings, there are now high-interest accounts offered by some banks.
Just like a regular bank account, there are no penalties on withdrawals and the maintained account balance earns a higher rate of interest. Here are 5 of the most important things you should know about such accounts-
1. Interest Rate and Payout
The AER (Annual Equivalent Rate), or the applicable rate of interest if the interest is paid and compounded once at the end of the year, can be as high as 0.50% with some of the high-interest accounts. Once you deposit an amount, it can be withdrawn as and when you like without resulting in any penalties.
With regards to interest payout, you can either go for a monthly or annual payout option. If you select monthly payments, the interest will be paid at the end of every month. If you choose annual payout, the interest will be paid on the closure of the financial year (31st March).
2. Minimum Account Balance
A large number of Indians in the UK now prefers opening a high-interest account as it has minimum account balance requirements. As a matter of fact, some banks allow you to start saving as little as GBP 1 per month.
This ensures that Indians who have recently moved and started working in the UK can also take advantage of this account. As for the maximum amount, there is generally no limit on the amount you can deposit in such accounts every month.
3. Regular Transfers from Linked Account
One of the goals behind opening a high-interest account is to inculcate the habit of saving. For this, some of the banks allow you to link an existing bank account to the high-interest account. You can set up regular transfers from this linked account to the high-interest account.
For instance, you can link your salary account to the high-interest account and set up a transfer, of say GBP 500 per month, to this account. On a fixed date, the selected amount will be withdrawn from your salary account and get deposited in the high-interest account. This will not just allow you to save regularly but also help you earn higher interest on your savings.
4. Eligibility Requirements
You need to be a UK resident for at least the last year and above the age of 18 years for opening a high-interest account.
You also need to have a UK bank account that can be linked to the high-interest account for initial and future deposits. You should also have a valid email address and documents like ID proof and address proof for opening the account.
5. Account Opening Process
You can open a high-interest savings account online. Simply fill the account opening form, and your new account will be operational within 3-5 working days as long as the form and the submitted documents are in order. You can either open the account individually or jointly.
You will receive all the information about your new account through email once your application is processed. In case of any queries, you can always get in touch with the support team of the bank.
Start Saving with a High-Interest Account Today
Regular saving plays an important role in helping you get closer to a financially stable life. With a high-interest account in the UK, you can not only save regularly but also earn high interest on your savings. You can access your funds anytime you like and also increase or reduce the monthly deposit amount just the way you like.
Look for a reputed bank offering high-interest account facility to start experiencing these benefits as soon as possible.
Created on Nov 26th 2019 00:30. Viewed 279 times.