Personal Finance

Regular savings accounts

Regular savings accounts a good way to save money though small deposits and builds your savings gradually. Regular savings accounts help to encourage people to make regular monthly savings. There are numerous savings institutions such as banks and building societies which offers regular savings accounts.

Starting a regular savings account is an ideal option for short-term goals and emergencies. Regular savings accounts are also an ideal option for those who need easy access to their money or for those who are in need of overdraft protection for their checking account. One can set up a direct debit or a standing order from any desired bank account, which will transfer a particular amount every month into his/her saving account.

Some of the major advantages of regular savings accounts include:

  • You can make frequent small deposits and build your savings gradually.
  • You can deposits or withdraw money whenever needed.
  • Interest earns interest.
  • Funds are completely accessible, safe, and secure.

Generally, most of the banks and savings institutions provide a higher interest rate for regular savings accounts than the normal savings account. It is advisable that the account holder must check the interest rate provided for their regular savings accounts. Compare your interest rate with some other financial institution – there are lots of chances for you to get a much better deal, without having to make an obligation to your regular savings.

According to financial experts it is always better to save a fixed amount of money every month. You can save the money according to your financial situation. Even the modest amounts can add up to build your savings gradually. By saving a small amount regularly in your regular savings accounts you may not change your standard of living now but you can make plans for later. Your small savings will be an option for you to fund your child’s education or for a holiday outing. There are also certain regular savings accounts schemes which are only available for people of a particular age such as pensioners or children.

There are certain accounts which do not have any liability to taxation and are free of tax. The accounts are well suited for those who need to pay tax, especially for those who are paying a higher tax rate. You can start a regular savings account in your spouse/partner’s name if you are a taxpayer. Starting a regular savings account in your spouse/partner’s name or by transferring your existing investments into their name will help to reduce your total tax. These regular saving accounts plans will help you to save considerable amount of money.

Whatever may be your investment objective, starting a regular savings account is a good idea. Maximizing the tax efficiency of your regular savings investment will surely boost your returns over the medium to long term.