How does a savings account work?

At times, we all aspire to put money into an account for a rainy day, a dream holiday or a new car. The role of the savings account is just for that. All major banks and building societies offer some kind of basic savings account. They can be paid into on a regular basis, say by standing order or direct debit, or in an ad-hoc way. For example, you may want to place any leftover money after your bills are paid; this amount may vary from month to month.

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Security for such things is tight. You’ll need to deposit a certain amount when setting up the account. In many cases, criminals will use this for money laundering, and so an AML ID VERIFICATION, like that from will do required.

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As you save, the bank will reward you with an interest payment. This rate can vary depending on the bank of England base rate. If the base rate is low, then the returns on the savings account will reflect this. It’s been that way for many years, since 2008 when it was reduced to 0.5%. However, if it rises, as is the case with it now set to 2.25 per cent, so should the return. Sadly, banks are quick to raise their mortgage lending rates but, strangely, not the interest rate on their savings accounts.

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