What is a high interest rate savings account?
A high-Interest rate savings account acts like a guarded place to retain the money you want to save for the short or long term. In comparison to regular savings accounts in the country, a high-Interest rate savings account can offer an interest rate that’s considerably higher than the average interest rate.
If you are looking to grow your money in less time, then a high-Interest rate savings account is important for you. Furthermore, the difference in money Interest rate may be notable as your savings balance increases with time, particularly when interest rates for regular savings accounts fall.
To know what a high Interest rate savings account is you must know what is a savings account - It is a deposit account offered by established banks and financial institutions of the country. You can deposit your money into a savings account, and the bank pays you interest on your balance amount. If you have earned more interest than usual, the interest earned must be reported when filing your taxes at the end of the fiscal year.
A high-Interest rate savings account works similarly to that of a regular savings account but with a key difference. The interest rate you earn may be much higher than the one you gain in a regular savings account at a bank.
How does high interest rate savings account work?
Compound interest permits your savings to grow at a rapid rate in a high-Interest rate savings account.
In comparison with simple interest, compound interest implies you procure interest on your chief balance and the interest it acquires. How frequently your interest is compounded relies upon the savings account. Some compound daily, while others compound month to month. The more your interest compounds, the more prominent your return.
With a high-Interest rate savings account, you can pull out or move cash (counting electronic transfers, checks and wire transfers) out of your account up to six times each month without suffering a consequence charge or hazard having their account shut.
How to open a high interest rate savings account?
If your interest is towards opening a high-Interest rate savings bank account, then the process of opening the account is similar to the regular savings bank account.
You will just need to visit the bank branch in which you would like to open an account with the required documents as asked by the bank.
- Fill up the requisite form.
- Submit your documents.
- Your account will be active in 2 to 3 working days.
Moreover, before you opt for a high -Interest rate savings bank account, look for various features, benefits, and advantages it offers compare it to other banks, and then make a wise choice. Also ask the bank representative to explain to you the details on how a high Interest rate savings account works.
Important features to look for in a high-interest rate savings account
After understanding the basics of a high Interest rate savings bank account, you must also know the details on the important features the account holds and what are the added advantages that you can avail by opening a high Interest rate savings bank account in comparison to the regular one.
1. Interest rate
Compared to traditional bank accounts, the interest rate in a high Interest rate savings account is generally more than a regular savings bank account. The savings bank account interest rates are mostly flexible and can be changed at any time. But some of the banks pre-specify the interest rates for an initial period. Another factor to look for is minimum and maximum balance thresholds for earning the increased interest rate.
2. Required initial deposit
Before you open an account, you must know and seek information from the bank regarding the initial amount of money that is required to open a high-Interest rate savings bank account.
3. Minimum balance required
We all must save money for our future times and manage our finances accordingly, hence, knowing beforehand the minimum amount of money that is required by the bank to maintain throughout the process will help you manage your finances in a much better way.
4. Fees
Know the amount of fees the bank charges on opening the high-Interest rate savings account. In addition, are there any other fees or charges that you will be required to pay in the process must be cleared in the first place before you choose to open a bank account.
5. Deposit options
If you wish to deposit checks into the account, does the bank have a smartphone app that deposits it from the comfort of your home? Or will you be able to mail in checks or deposit them at the nearby ATM?
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This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empanelled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees, and contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.
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