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Savings Accounts

admin — Wed, 04 Aug 2010 10:45:52 +0000

The Many Varieties of Savings Accounts If your parents did a good job teaching you about saving money, you had a piggy bank somewhere in your room growing up. Like many parents, they probably coaxed you into adding to it by offering to match all your deposits. Then, at some point, you just started contributing your babysitting or lawn mowing money on your own and watched as your nest egg grew. After years of pennies and quarters, you hopefully amassed a small fortune. Ultimately, you realized it would fare better in a savings account at a bank. Not only is a deposit account, like a savings account, a safe place to store your money (thanks to the FDIC or NCUA), it is also a great place to let your money grow and prosper with compounding interest. Most financial novices are familiar with the terms of traditional or high yield savings accounts. Both these accounts allow depositors to store their money in the bank and earn a rate of return while keeping the balance liquid. However, these are not the only options available to you. There are a variety of savings account types that you may want to take advantage of.

Savings Accounts for Minors

These types of accounts are only offered to those under the ages of 18 and are a great way to move money from a piggy bank to a real financial institution. Proof of age is required and in return, children will have their money safely on deposit, can earn a decent rate of return and can avoid many fees associated with typical savings accounts.

Health Savings Accounts (HSA)

President Bush first approved health savings accounts in 2003 when he signed the Medicare Bill. The U.S. Treasury states that HSA accounts have been “designed to help individuals save for future qualified medical and retiree health expenses on a tax-free basis.” There are certain caps on how much money can be deposited into a HSA annually and the money can only be used to pay for qualified medical expenses. Recently, the interest rate for HSAs has been higher than traditional savings accounts, so if you could benefit from an HSA, this may be a great opportunity to grow your savings.

Christmas/Holiday Savings Accounts

Sometimes an economic downturn can really ruin the holidays. Organization and planning is the key to your future fun and a Christmas or other holiday savings account is an excellent way to do so. These types of accounts tend to be short-term savings accounts that allow a maximum deposit amount. However, that deposit amount will be entitled to a high yield interest rate that can turn your spare pennies into a bundle of cash. They typically mature right before the holiday shopping season begins (access to funds is limited the rest of the year). The best way to decide what type of savings opportunity is right for you is by building a budget and figuring out what you really need to save for. This practice can help you decide if one of these savings account options are right for you.

Understanding The Guarantee On Your ISA Rates

admin — Mon, 01 Feb 2010 12:28:48 +0000

Although ISA managers can change the rates at anytime, you can help ensure you get the best ISA rates for the longest period of time with a rate guarantee. A rate guarantee is simply a special introductory rate that is given for a certain amount of time.

To attract more clients, banks compete for your business by offering higher rates of interest. But, once they’ve got your account, the interest rate will soon become much lower. The good news is that with a rate guarantee you can make sure that you get the higher interest for a set time.

Some institutions only offer a guarantee that you will receive the introductory rate for six months, while others will guarantee their higher rate for at least a year. And, if you want to earn the best ISA rates, it’s critical that you know exactly how long the rate guarantee lasts.

While a fixed rate ISA account isn’t subject to interest changes, a variable rate account can go from a high rate to a low rate virtually overnight. Understanding the rate guarantee and knowing exactly how long it lasts can prevent you from losing a lot of money on your savings in interest payments.

Do You Need A Second Chance Bank Account?

admin — Mon, 22 Jun 2009 23:00:39 +0000

There can be several reasons why you might not be able to open a bank account. Perhaps you bounced a few checks and ended up owing a bank money for multiple fees. Or, maybe your bank account ended up in a negative state due to divorce or unemployment.

A bank account can be very convenient, but it can also be a necessity. Most banks simply refuse to cash a check for anyone that doesn’t have an account and if they do, they charge a hefty fee. And, check cashing places charge a minimum fee plus a percentage of the amount of the check which can add up to a lot of money.

If you’ve been turned down for a bank account at a traditional institution, you might need to open a second chance bank account. There are numerous places that offer a second chance to anyone that is unable to obtain a checking account and you can get approved almost instantly.

Although there are fees associated with opening and maintaining a second chance account, they’re much less than the fees you’ll have to pay to cash a check. It could even serve as a temporary account until you can pay off what ever money you owe your bank.