Monthly Interest Savings Accounts
Monthly Interest Savings Accounts: As with any other form of investment in the UK, you should try to learn as much as possible about a monthly interest bank account. This post answers the five most common questions about these accounts.
If you are looking for a safe and hassle-free way to grow your savings, a monthly interest bearing account in the UK can be a great option. The account not only earns fixed interest but also allows you to deposit and withdraw funds whenever you want. Interest is calculated based on the balance and credited at the end of every month.
But while a monthly interest account isn’t as complicated as other forms of investing, you should get all of your questions answered before proceeding with the account opening process. Below are answers to five common questions about these monthly interest accounts-
What is the interest rate for a monthly interest account?
The interest rate varies depending on the bank you choose. Some of the top UK banks offer 1.00% AER (Annual Equivalent Rate) on their monthly interest accounts. This makes them a better option than standard savings accounts that offer significantly lower interest rates.
For your interest savings account, you can compare top banks and choose the bank that offers the most competitive interest rate.
How to fund your monthly interest account?
In most cases, you will need to link your monthly interest account with another current account with the same bank. Deposits and withdrawals to the interest account are processed through this linked account.
Some banks also allow you to set up a monthly savings plan where a fixed amount is automatically withdrawn from your linked account and deposited into an interest-bearing account to help you earn more interest.
Are there any withdrawal fees?
This again depends on the bank you choose. Some banks have limits on how many withdrawals you can make in a month. Withdrawals exceeding the limit incur withdrawal charges.
But there are banks in the UK where there is no such restriction. They allow you to deposit and withdraw your funds as many times as you like.
What are the minimum balance requirements?
Most high interest accounts in the UK require a high minimum balance of £1,000 or more. But you should prefer banks that have low or preferably no minimum balance requirements.
Banks with high balance requirements block your funds unnecessarily and it can be challenging to maintain a balance every month, especially if you have just started earning and saving. You will also be penalized if the balance falls below the minimum limit.
What are the eligibility requirements for a monthly interest account?
If you are above 18 years of age and already have a bank account, you can easily open a monthly interest savings account in the UK. But note that the bank may want to verify your identity and address before processing your account opening request.
You can apply for an account online or visit the nearest bank branch to submit an account opening form.
Grow your savings with a monthly interest bank account
Earning interest every month and being able to access your funds at any time are advantages that you don’t usually get with many investment options in the UK.
Now that you have answers to some common questions, find a top bank to open your monthly interest-free account and watch your savings grow.