High Interest Savings Accounts - 5 Conditions to take note
Check the conditions that exist
So you have found a high interest savings account that ticks all the right boxes in terms of interest and convenience. The next thing to check is that you meet the conditions of that account to get the high level of interest. The main conditions that you might find on a high interest savings account are detailed.
Minimum opening balance
Some banks will require you to have a certain level of funds in your savings account in order to open the account or gain interest on the money within. Check that you meet and will continue to be above the minimum amount in the future otherwise you wont be able to make the most of your money.
Minimum required deposit each month
Some banks might offer a high interest saving account if you meet certain conditions on depositing money into the account on a regular basis. This means that you are required to deposit that minimum amount and if you don't then you might not earn any interest on your money or even encounter fees. One way to ensure that regular deposits are made is by having your wages or salary automatically added to the high interest account.
Limits on withdrawing money from account
Some accounts might have a requirement of no money be taken out of the account otherwise all interest might be forfeited for the month. For such a situation to work, you must know that you can be very diligent and stick to not withdrawing and also keep buffer reserves of money for unexpected purchases. For some people, these accounts could be suitable while for others they could end up never earning any interest.
Limits on number of transactions from account
Some accounts might have a maximum number of withdrawals that you can make from the account in a month. It might specify a maximum of two withdrawals per month with any over this incurring a fee, no interest or both. Again, these accounts would be suitable for those who are very controlled in their finances.
Required level of funds in a linked account
This can catch some people out as they don't fully read the conditions or understand how the account works. Requiring a certain level of funds in a linked account means that you are required to have another account with that bank with a certain level of money in it. This could require that you have an amount such as $10,000 that you may receive little or no interest on. You haveto weigh up whether you will have enough money in the higher interest earning account to make up for the lost interest on the funds in the linked accounts.