Regular savings accounts provide a good discipline to save, as contributions are generally by standing order, and missed payments can lead to loss of interest, and/or downgrading to a lower interest rate, or even account closure. Regular savings are a useful tool for those saving for a specific goal in the future such as a wedding or other special occasion, university fees, perhaps a trip of a lifetime, in fact anything.
Some accounts are open-ended, others are for a specific period of time such as one, three or five years. Withdrawals from these accounts are usually limited to typically one or two a year but some accounts permit no withdrawals whatsoever
until the agreed term has expired. If you exceed the permitted number of withdrawals, and you could lose interest or have the account downgraded to a lower interest rate, or both! Also, there may be restrictions on contribution changes. Some providers allow you to change once a year, some once a year but only upwards, others are more flexible.
You can save as little as £10 a month up to a maximum set by the bank. Maximum payments can range anywhere between £100 to £1000, but remember whatever sum you set it is a regular monthly payment, so make sure you can afford it. Regular savings accounts do not as a rule accept lump sums.
Back...
