Bank and Building Society Accounts
These accounts
are a low-risk method of managing your money. From current accounts
that let you efficiently manage your daily transactions to low-risk
savings accounts, these types of account are long-established and
safe option for managing your money.
Savings Account
Generally reserved for storing cash you do not need to access
quickly, Savings Accounts will offer you a higher interest
rate for your money.
It is considered low-risk, and you will always get back at least
the same amount that you opened the account with.
Terms and conditions
will vary from bank to bank, but in general you are limited
to the amount you can withdraw in any given period,
and for some accounts there may be a notice-period to prior to
receiving your cash. There is usually no overdraft feature, nor
is there any
system for charging bills to the account. The option to withdraw
cash from an automated teller machine is usually available.
You
will be required to prove your identity (by law, as part of measures
against money laundering) in order to open a Savings
Account.
Current
Account
This provides account-holders with a way to efficiently manage
their daily financial transactions. It gives you the option
to pay bills
automatically (direct debit), receive cash (such as a salary),
and pay for things and services without cash (through a cheque).
Current
Accounts are deposit-based, so like Savings Accounts you always
get back at least the same amount you put in.
You could
allow interest to accrue but that is usually not the reason
why this type
of account is opened in the first place. Rather, they are
to help people manage their transactions more easily. Usually
Current Accounts
have very low rates of interest. Some accounts offer an
overdraft allowance that charges a fee for any money borrowed from
it.
The fee is usually a percentage of the amount borrowed.
Just
like a Savings Account, you will be required to prove your identity
to open a Current Account, with the overdraft
allowance
depending
on the bank’s discretion and your financial situation
or credit rating.
Different banks
offer differing interest rates, fees and penalties. Keep in mind
while shopping
around, that
the
terms and conditions
of your account may change. Interest rates will depend
on changes to the base rates.
Offset
Account
Depending on your situation, an Offset Account can
be a smart way to make your money work harder for
you. This
will first
require that you have your mortgage and current account
with the same
company.
