Car Insurers Debate Over Future Profits

UK car insurers have been running an unprofitable business for 14 years. Independent market analysts, Datamonitor, say 2009 looks to be a profitable year despite the doubts

March 13, 2008

Budget Report Expectations

Chancellor Darling's Budget Report is expected to raise taxes on alcohol, fuel emissions, flights and many other issues concerning the economy. Tax burdens expected to increase on poorer families

March 12, 2008

Card Fraud Rises Again

Card fraud has increased over past year. Whilst chip and PIN technology has been successful in the UK, criminal activity overseas has increased 77 per cent

March 12, 2008

Tax Cuts Needed To Restore Confidence

Appeals for corporate tax cuts are submitted to the Treasury as it prepares its Budget report this Wednesday. Business and banking sectors are worried about the direction of the UK economy

March 10, 2008

First Time Buyers Take Hit From Stamp Duty

Stamp duty tax has not kept up with the rate of increase in house price inflation over the past decade. Yet another hurdle first-time buyers must leap over to get on the property ladder

March 10, 2008

Read all Finance News

Bank Account Basics

When it comes to managing everyday money there are two main types of UK bank accounts.

Basic Bank Accounts

This type of bank account is exactly as its name implies. It offers clients a convenient and safe place to keep their money for everyday use.

The main features are:

• Wages, State Pensions, benefits or tax credits can be paid into it.
• Cheques or cash can be deposited into the account free from any charges.
• Direct debits can be set up.
• A cash card is issued with can be used at bank cash points.
• Debit card are also available which can be used to pay for items and obtain cashback providing sufficient funds are available in the account.
• Cheque book are unavailable.
• Overdraft facilities do not apply.

A Basic Bank Account is a safe option for anyone who wants to avoid going overdrawn or who may not get past a bank’s credit check in order to open a regular current account.

Current Accounts

UK current accounts offer more features than a basic bank account and some current accounts even pay interest on any money left in the account, although this is usually at a very low rate.

The main features are:

• Cheque book
• Cheque guarantee card
• Debit card
• Direct debits can be set up
• Standing orders can be set up
• A bankers' automatic clearing service (BACS) facility, where payments can be accepted directly into your account or one-off payment can be made to someone else from your account.
• An overdraft facility can be arranged although charges do apply if you exceed the agreed overdraft limit.
• Telephone and online banking.

A current account is ideal for those who want more than what a basic bank account has to offer. It is however important to note that these two types of bank account are deposit-based only which means you only get back what you put in.

Banks also offer a wide range of savings accounts and these types of accounts usually pay a far higher interest rate than any basic or current account. There are various types of savings account and the main differences between them are: the rate of interest they pay out, how quickly you can access your money and the minimum amount required in order to keep the account open.

The main things to consider before deciding on a savings account are: how you want your money to work for you i.e. are you looking for a short-term or long-term investment plan, how you want to access your money, when you want to access your money and how you prefer to have the interest paid (the choice being between monthly or annually).

The main types of savings accounts are:

Instant Access Savings Account

An instant access savings account offers a higher rate of interest than that of a current account, while you can still withdraw any funds as and when you wish. Notice accounts of either 30, 60 or 90 days do however offer an even higher rate of interest.

Bonds

By investing your money in bonds you will attract higher interest rates however with most bonds the interest rates do tend to be fixed. Money is held in a bond for a specific period of time without the ability to deposit more or make a withdrawal throughout the period of term. In general the investment terms range anywhere from 6 months to 5 years and are a good option for a long-term savings plan.

ISA’s

ISA’s or Individual Savings Accounts allow the investor to save a maximum sum each year tax-free. There are two main types of ISA, mini cash and maxi. Cash ISA’s are much more popular due to their familiarity to any savings account. They allow you to deposit a maximum of £3,000 in each tax year, which runs from 6th April to the following 5th April of the next calendar year. You can withdraw any sum you wish however you may not top up your deposit at a later date if you have already saved the £3,000 within that tax year. As your balance grows so does the interest rate on your capital.

A maxi ISA allow you to invest up to £7,000 in any one tax year which is invested in stocks and shares. These are also known as equity ISA’s.

The Government introduced ISA’s back in 1999 in order to tempt more people into saving money for the future and since then they have become increasingly popular.

By investing wisely in a savings account you can learn how to make the most of your money by watching your savings grow with the benefit of a higher interest rate.

Compare cheap loans, mortgages, credit cards, insurance and bank accounts. Save time and money at the MoneyOutlet.

Published on September 30, 2007

Bank Charge Case To Go On For Weeks

The Office of Fair Trading is hoping the High Court will rule in its favour which would allow banks' fees to be challenged under consumer law. There are eight lenders who are accused of making unfair charges to customers, among them is the Royal Bank of Scotland. The High Court, however, has been told that current account customers are comfortable with the system of charges of current accounts... Read More
January 24, 2008

Banks Have Hit Savers' Interest Rates

The global credit crisis has eventually led to the Bank of England cutting back the base rate to 5.5%. Consumers were hopeful that UK banks would reduce their mortgage rates in accordance with the lowered base rate but many still refuse to pass on any significant savings. Experts agree banks are trying to recoup losses. Now banks are cutting their rates on savings accounts... Read More
January 14, 2008

Bank Loyalty On The Wane

Britain has seen an increase in customers switching to a new bank. Many customers say they feel their bank doesn't treat them as a valuable customer or have experienced unhelpful staff. Just a few years ago less than 1 in 10 switched whereas today, almost 1 in 5 are opting for a new bank. Research shows banks need to focus on customer support more than ever... Read More
December 11, 2007

Abbey Cut Back Savings Rates

Lenders have been tightening their lending criteria on mortgage and loan borrowing and now seem to be doing the same with savings rates as well. Some of the top banks are cutting back rates however, you may be able to find a good deal if you can afford large deposits each month. Shopping online for a savings or current account is recommended... Read More
December 10, 2007

Co-op Breaks FSA Guidelines On Overdraft Charges

The Co-operative bank has changed their guidelines toward overdraft charges which some say will affect low income customers who tend to run out of money before the end of the month. These changes seem to be in violation of FSA guidelines. Those on benefits could be hit hardest... Read More
December 3, 2007

Read all Banking and Saving Articles

Personal Banking Centre - Tips & Information

• Bank Account Basics
• A Brief Guide To Savings Accounts
• Understanding ISA’s
• Why Children’s Saving Accounts Are A Good Idea
• Child Trust Funds