Savings accounts cover a wide range of accounts varying from a Cash Individual Savings Account (ISA), fixed rate accounts, offshore accounts, student accounts and joint accounts. Your bank will most likely offer you the option of opening a savings account. Savings accounts are on the whole beneficial for gaining interest on your money and your funds may not be accessed directly as money. For many people a savings account is useful for ensuring that your money is permanently put aside and out of reach and as you won’t be provided with a credit card connected to your account your funds can’t simply be withdrawn from an ATM. By opening a savings account you can begin setting money aside, money that will be useful for emergency funds or if an unexpected expense arises. One of the most advantageous aspects of a savings account is the interest rate however these rates vary between banks and according to the rate set by the Bank of England. Therefore it is important that you understand that interest rates on your savings rate often fluctuate. If you want to avoid these fluctuating interest rates then a fixed rate account will suit your circumstance.
Before opening a bank account if you are not yet registered with a bank or building society this must be completed first. Then you are eligible to open a bank account but always take the time to choose a bank account that best suits you. At this point you will be assisted in setting up your account and your bank will explain what details and information are needed such as proof of identification and some proof of your address. It is law that you provide proof of identity so as to prevent criminal activity such as money laundering and as a result your money is sure to be kept safe. Additionally you will be taken through the costs involved, the terms and conditions, spending limits, overdraft facilities and any interest rates that incur with whatever account you have chosen to open. It is always advised to thoroughly check the terms and conditions your bank lay out for opening an account with them however if there are any changes made you should always be notified before they take effect as an obligatory rule for the bank.
Often when you first opt to open a bank account the most straightforward account offered will be a basic bank account. A basic bank account is an account where the state of your credit history isn’t an issue and if you are in the situation where you have a poor credit rating in most cases it will be difficult to successfully be granted a current account. A current account can be set up and accessed either through visiting your local branch, online or over the telephone. Most people will have a current account where they are provided with a debit card which is used to withdraw money and make payments. With your current account money can be deposited and withdrawn at any point and with the majority of banks there are no restrictions on the number and amount of deposits and withdrawals. The advantages of having a current account means that money transactions can be completed smoothly and without hassle and when opening a current account your bank may offer you overdraft facilities however if you choose not to have an overdraft at the start you may organise an overdraft with your bank at any time. An overdraft allows you to be overdrawn by a fixed amount and it is important to remember that your bank will charge interest on the amount you have overdrawn and for the period of time. Many people use overdraft facilities as they are particularly useful when you are left in bad cashflow situations. An overdraft can help you complete payment and pay bills so you don’t fall behind, however it is advisable that you or your business are not reliant on an overdraft as they can be costly and unfortunately be recalled by your bank at any point so it is essential you are aware of this. In addition you may be charges a fine if you enter into unauthorised overdraft territory. The amount on your overdraft is decided by your bank after your personal situation and finances are considered. An extra feature of transaction accounts is a cheque book which can be used to make payments. Although nowadays cheques are used less frequently as due to modern technology payments are often made through online banking or other means.
Current accounts fall under a standard bank account and are offered by most banks and building societies. Your money can be safely stored in a bank account either through a current account or other types of accounts offered by your bank such as a saving account, fixed rate account, offshore savings account, business or student accounts and many more that can be suited to your situation. By setting up a bank account managing and organising your money is easier and safer. For example paying your bills and debts is much more convenient and receiving funds such as your salary or benefits are completed through the means of a bank account. The benefits of having a bank account are numerous as not only does controlling your finances become much easier but your checking account can also be used to receive funds from overseas, be it from an individual or a business corporation, and help you in saving money for the future. If you are saving money for a particular purpose keeping your money in a bank account means that it’s put aside and while your funds are in the account you can gain interest so the value of your money grows over the years. Choosing the right type of bank account for you and your needs is a simple process as information on banking and what type of account you might need can be found everywhere, either online or by visiting your local bank.