Perhaps the main reason anyone opens a bank account is to save money. Every savings accounts will yield you, the account holder, some form of interest on the amount you deposit into the account. The amount of interest depends on the rate of interest that particular financial institution provides. Why do high-interest savings accounts seem more attractive?
Some accounts provide a higher interest rate, which means better or more savings. Especially, in an economy where inflation rates are greater than 1%, this is significant because the average savings falls short of this number, resulting in a loss from having a savings account.
There are many things to consider when you look for a high-interest yielding savings account. These are some of the most important factors.
#1. Think whether a high street bank or a direct bank will be the better option for you. High Street banks are usually costlier because they have to employ staff and have physical premises which they will need to keep up.
However, direct banks manage all their dealings online or through the phone, and therefore the costs are low. The result is that they can provide better interest rates.
Although, some people like the convenience they get from interacting with live people in a high street bank. You have to make the decision here – do you want the ease of dealing with real characters at a lower rate of interest or will you be able to handle all your bank transactions automatically at a higher rate of interest?