Who doesn’t want extra money? Fortunately for savers, several savings products offer guaranteed returns. By choosing between different accounts and providers, people can find the perfect product to suit their financial needs – whether they’re looking for a place to earn interest or a way to save for retirement.
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What is a bonus savings account?
A bonus saver account is a type of deposit account that typically offers a short-term cash reward to customers who make regular deposits, usually every month. These accounts only require a small deposit and typically offer attractive interest rates that can help keep your money working for you. For this reason, bonus saver accounts are best suited to those who don’t want to commit too much cash at once or tie up their funds long-term.
What are the benefits of a bonus savings account?
Keep your money accessible.
With a bonus saver account, you can withdraw cash at any time without incurring a penalty. When compared to savings accounts that offer a fixed interest rate for a set period or term deposit accounts that require a large initial investment, bonus saver accounts give you the flexibility to access your funds as you need them.
Earn competitive returns
In addition to offering liquidity and accessibility, many bonus saver accounts also come with attractive interest rates as explained here https://www.ocbc.com/personal-banking/deposits/bonus-plus-savings-account. You can often earn more than the average savings account by maximizing your interest earnings and choosing a product that offers a competitive rate.
Build up your savings
A bonus saver account is typically designed to help you save small amounts of money each month. By accumulating these contributions over time, it’s possible to build a significant amount of cash in a relatively short period. In addition, by making regular deposits each month, you’ll avoid the temptation to spend any funds you have put aside.
Reduce your tax burden
Earnings from savings accounts are typically taxed at the same rate as other income, which can significantly eat into your earnings. For this reason, most people prefer to earn their interest on non-taxable products like retirement accounts or insurance policies. With a bonus saver account, you can avoid taxation on any cash rewards you receive and may even be able to use them tax-free for future medical expenses.
How does a bonus saving account work?
A bonus saver account is a deposit product that typically requires a small monthly deposit to qualify for interest and a bonus interest when you don’t make a withdrawal in the month.
Interest is often credited to your account monthly, typically calculated daily or weekly. Bonus interest may be added at the end of each month, payable when you make no further withdrawals. Interest rates for bonus saver accounts tend to be higher than average savings accounts, but they are still not as high as terms that require a larger initial deposit.
Bonus saver accounts are designed to help you save regularly, but they also come with some of the most competitive interest rates available. With no set term or minimum deposit amount, these accounts offer more flexibility than other types of savings.
Who is the bonus saving account best suited for?
A bonus saver account is best suited to customers who want the opportunity to save regularly without having to commit too much money. By setting aside a small amount each month, most people can build up their savings in a shorter period. It’s perfect for people who want to set aside money for specific goals, people who don’t want to tie up their funds long-term, and people who don’t want to commit too much cash at once or pay the penalty for withdrawing it early.
Conclusion
Bonus saver accounts are flexible, easy to understand, and best suited for people who don’t want to commit too much cash at once. They usually require a small monthly payment which can build up over time or be withdrawn at any time without penalty. However, bonus saver accounts typically have lower interest rates than CDs and fixed-rate retirement products. While there is no fixed-term commitment, customers need to make ongoing contributions to maintain eligibility for interest.
