Benefits for Holders of High-Interest Savings Accounts
A high interest savings account is a type of account that yields good interest rates and is FDIC insured. It comes with a higher minimum account balance and restrictions on the number of withdrawals allowed. The restrictions are intended to minimize costs for the financial institution. They allow banks to offer more money in the form of loans. Financial establishments lend money, and this allows them to pay interest to holders of special savings accounts.
Opening an Account
Customers can open an account at a local branch or by phone. Many banks advertise paperless record keeping, free transfers, and no monthly fees. Customers also benefit from competitive interest rates and additional features such as electronic transfers, pre-authorized contributions, and specialty banking services. These include services for senior citizens such as discounts on safety deposit boxes, free-of-charge drafts and money orders, and free checks. Seniors also benefit from stop payment options and commission-free travellers cheques. Customers who open a high interest savings account are sent email alerts and text messages to keep them updated on their account activity and limits as well as transactions and balances. Account holders also benefit from pre-authorized contributions, which allow them to build savings. Customers can contribute annually, semi-annually, monthly, or weekly. They can choose from a selection of investment instruments and are allowed to specify investment amounts. In addition, account holders pay less in taxes and can choose contribution amounts. Compound savings are an additional benefit. Bank clients who open a high interest savings account also enjoy direct deposit and bank-to-bank transfer services. They can transfer their savings to the account and earn interest on them. Holders can deposit money into the account and send money via Western Union.
Charges and Fees
Recordkeeping services may incur additional charges. There are also cash advance fees and fees for processing mailed-in and postdated deposits. In addition, holders of high interest savings accounts may be charged fees for cross border transfers, assisted telephone transactions, and mobile banking. Some financial institutions also charge payment and check processing fees and overdraft protection fees.
In addition, banks charge search and transfer fees. There are charges for mail, fax, and phone requests to make deposits and cover checks. Customers also pay fees for forms and letters and balance inquiries. Depending on the plan of choice, account holders may also pay charges for passbooks and paper statements. Account closing charges apply if the holder decides to close the account 3 months after opening.
Are You Eligible
It is easy to apply for a high interest savings account. You should be of legal age, have a residential address, and be a resident or citizen for tax purposes. You need to fill in your email and phone number. Banks also require personal and financial details such as your routing number, bank account information, date of birth, and Social Security number. Once the applicant chooses an account type, he can apply online or by telephone. The bank will send an email to confirm that the application has been processed and confirmed. Then the account holder can deposit money by check or electronically. Clients can transfer money by phone or online or they may link their savings account to their bank account. There is an option to link two or more external accounts. The funds begin to earn interest on the day the bank receives the deposit. Another option is to transfer money by check. Note that some banks limit and refuse deposits made by using certain types of checks. For instance, some financial institutions do not accept travellers, starter, counter, and multiple-endorsed checks. Banks may refuse to accept money orders as well.
Direct deposits and automatic transfers are allowed. Account holders may opt for recurring deposits whereby money is transferred automatically from one or more external accounts. You can set up a preferred frequency for automatic transfers. Direct deposits are another option. You can deposit your pension, social security, or a portion of your payroll into the account.
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