High Interest Accounts: Adhering to the Rules

2007-03-08 10:33:40

( Financial )



THE PASSIVE INVESTMENT

High interest accounts are a very safe way to invest your hard earned money. The good thing about opening and maintaining high interest rate accounts is that while your money passively sits in the bank, its value increases because of the high interest rates that your savings accrues over time.

The premise of high interest accounts is very simple; you keep your money in the bank in the form of a savings account, your money is then used by the bank to fund their lending business. In return for using your money, the bank pays you back in the form of an interest rate which is based on how much principal money you have saved.

The more money you put in the bank, the more it will earn in terms of interest rates. If you plan to use your high interest accounts as an investment plan, make sure to follow the guidelines that govern these types of high interest rate accounts.

SPECIFIC RULES

High interest accounts have very specific rules that must be strictly followed. If you open one, you have to be mindful of such guidelines because failure to do so may result in your account not earning any interest at all.

These high interest accounts guidelines vary from bank to bank, but they are generally similar in the sense that these guidelines limits the number of transactions that can be made against the savings account. Usually, there is a certain number of withdrawals that you can make every month, if you exceed this number, then there will be penalties that will be taken against your savings account.

Of course, you also have to maintain a certain amount in the bank. If your high interest accounts go lower than the minimum maintaining balance, your account will be penalized and will not earn any interest for that month.


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