Q2A
Got a question about......
opening a bank account; i already have an ISA and want one where my money will
get good interest. have you any information on which bank is a good one for this type of account.
thanks
This is our reply.......
Hi, thanks for contacting q2a.
There are lots of different banks and different types of bank account, and to work out which will be the best one for your circumstances is to think about what you want the account to do for you. Saving up would seem to be your main priority, and in the current economic climate it's an excellent reason! But there are other things you can consider as well, for example:
# Can you have money paid in e.g. wages/salary, student loan, and welfare benefits?
# Can you pay bills by direct debit or standing order?
# Can you have access to credit e.g. a credit card, an overdraft or personal loans
# Are there cash machines near to where you live or work, and are they free to
make withdrawals from?
# Is there a branch nearby in case you need to speak to someone face to face?
# Can you bank through the Post Office?
# Do they offer 24 hour telephone banking?
# Do they offer internet banking?
There are two main types of account offered by banks and building societies:
# Current accounts. These offer e.g. cash cards, credit cards, debit cards, direct debits, standing orders, cheque book and cheque guarantee card (used less and less
now), overdrafts, interest on credit balances. Current accounts which offer the best
interest rates often ask for a minimum amount to be paid in every month, or ask for the credit balance to stay above a certain amount, or they're only offered online. There can be charges or penalties if you don't stick to the rules
# Savings accounts. These pay interest and, again the best interest rates come
with rules attached such as a minimum opening deposit and a minimum amount for any
subsequent deposits, daily minimum and maximum amounts for withdrawals, having to
give notice to draw out money or lose the interest, or they're only offered online. There's usually a cash card so that you can make withdrawals but there are no credit facilities
Whilst the interest paid into ISA's is tax free, the interest on other types of account can be paid net of income tax, or can be paid gross so if you're a tax payer you need to declare it to HM Revenue and Customs so that they can adjust your tax code. Some accounts offer fixed rates of interest for a period of time, on other accounts the interest rates will vary.
So first of all, if you're a tax payer you may want to save up to the £7,200 limit in your ISA because it's tax free (if you haven't already done so). You can save up to £3,600 in a cash ISA and have the rest in stocks and shares. From 6th April 2010 the limit will rise to £10,200 for everyone, £5,100 of which can be saved in a cash ISA. Then start to look for an account that suits your needs. You can do this by:
# Calling into individual branches and picking up leaflets - make sure you read the
small print
# Telephoning their Customer Services - have a list of questions ready
# Looking on their websites
# Looking in the financial pages of the daily newspapers. You can usually read
these for free in your local library or check their websites
# Using comparison websites e.g.
www.fsa.gov.uk/tables/bespoke/SavingsAccount
www.moneysavingexpert.com/banking/
www.moneysupermarket.com/savings
As well as banks and building societies there are also credit unions which offer savings
accounts. These are owned and run by their members, all of whom must share a common bond, for example share the same workplace, live in the same area, or belong to the same organisation e.g. a housing association. If saving with a credit union appeals to you, you can see if there's one in your area by contacting:
# The Association of British Credit Unions, telephone 0161 832 3694, website:
http://www.abcul.org
We hope this information helps you to find a suitable bank account. It's important to shop around and do the research so that you know exactly what you're getting. Please email us again if you think we can help, about this or anything else.
Best wishes from q2a.
Expert advice and every precaution has been taken to ensure that the information in this answer is trustworthy and reliable, but the publishers do not hold themselves responsible for any inaccuracy as information can go out of date very quickly. This page gives general guidance only and should not be treated as a complete and authoritative statement of the law. With regard to suggested weblinks given in this reply please note that Lancashire County Council is not responsible for the content of external internet sites. |
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