Deposit Accounts
Before investing into a deposit account spend some time looking at the rates that banks are currently offering. What account suits you best…. Fixed term deposit account or a variable deposit account. Once you have decided which bank deposit account would suit you best, find out from the bank exactly what rate you will be given and what terms will you have to meet to get this rate going forward. For example: Criteria on deposit accounts varies from bank to bank so do your homework so that you open the most suitable deposit account with the best rate.
What are the pitfalls to look out for?
Always remember to check the terms and conditions attached to these deposit accounts. Most of the terms attached by banks are very strict and if you fail to meet terms, the banks hit you with a reduced rate that can be very poor. As an example listed below are some important terms that you might have to meet if opening a deposit account.
- There will always be a minimum and maximum amount attached to deposit accounts. Remember to check that you meet these amounts and don't fall below or go over to get the rate quoted
- Banks will offer better rates for 60 day and 30 day deposit accounts than they will for an on-demand account. This means you will have to give them notice before you can take out your money
- Check if your deposit account has a condition that you must keep a minimum amount in it
- Some banks have a max amount of withdrawals attached to it.. Some banks don't even allow any withdrawals on the regular saver accounts for a specified amount of time
- Banks may insist on Direct Debit payments only for saving accounts
- Check the security rating of your bank and what guarantees are in place from regulatory or government authorities should the bank fail
Lump Sum Deposits:
Click here for Lump Sum deposit comparisons on the It’s Your Money website.
