We should all save for a rainy day and for the larger items that we like to spend our money on like, holidays, cars, televisions.
Common types of savings accounts.
These accounts typically are accessible just as much as a checking account or a regular account in a financial institution. As personal savings accounts, they accrue very little interest in contrast to their more strict counterparts. However, their interest rates are still larger than other personal accounts such as a current account or regular accounts.
These personal savings accounts are accounts in which access to the funds within is restricted and a period of notice is required, usually one to three months depending on the institution. It is possible to withdraw funds from a notice account early, however, this gains a penalty usually a loss of the high interest rate that the account was earning.
These are personal savings tools in which interest rates are set at the period that the account is set up and remains the same no matter what common interest rates are during the time of its effect. Savers can buy a savings issue tied to bonds that will pay a set rate of interest for a period.
You have to commit to saving a set amount each month to achieve a higher rate of interest. You normally set up a direct debit or standing order to achieve this. There are normally restrictions on with drawing your money and the typical account allows you to with draw once a year.
These are accounts in which an account is set up by mail or over the phone and are normally in a tax haven, or an area of low to no taxation. These accounts are costly to set up, but because taxes are avoided, larger sums can be put into one account with no fear of legal fees.
When setting up a savings account it is very important to look for minimum deposits required, as you may not be able to get the high rate of interest as you don’t have enough to invest, hence your account won’t even be opened.
It is also important to look for withdraw restrictions because early withdraws, always carry penalties on the interest you were being paid, so if your account requires three months notice ensure that non emergency money is used.
]]>A bond is a debt security means where the person or company that issues the bond owns the bond holder’s debt. Basically, a bond is a financial contract between the issuer and the bond holder with the agreement to pay money back with interest at scheduled, fixed intervals.
A bond is essentially a loan with a borrower, a creditor and a financial contract between the two. These bonds can provide to the borrower enough capital to fund long term investments or certificates of deposit (CDs). Bonds are like stocks as both of them are financial securities, however, in stocks, the shareholders have equity stake in the company of which the stock is from, and bonds have a defined and agreed upon term where they are effective in a preordained period of time.
Bonds come in many forms for many specific purposes. Several types of bonds include:
Bonds are a safe way to make investments during a rough economy. They make it easy to raise capital to fund investments and make it safer to hold that capital.
Bonds vary depending on their specific purposes and agreements. All regulations and repayments are based on the particular bond that is issued by a third party. This could be a bank, loan company, individual enterprise, or other financial institution.
]]>