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Instant Access Saving Accounts

By Richard Greenwood

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Published: 22Apr2008
Word count: 518
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There are several types of savings account that you can open in banks or other deposit-taking institutions. They usually offer instant access savings accounts, term deposit savings accounts, and high interest savings accounts.

Term deposits earn fixed rates of interest for the term, generally not less than one year, and require a substantial minimum amount to open the deposit. High interest savings accounts earn higher rates of interest but commonly use a variable rate, and are also very accessible mainly by linking it to a transaction account or a separate savings account. Although accessible, it is not unusual for high interest savings to place restrictions on the number of withdrawals or to require a minimum amount of deposit during the month in order to qualify for the higher rate.

In contrast, instant access savings accounts give you the convenience of access at any time to your deposit with the use of an ATM card. You will have to maintain a minimum balance on your instant access account and this may range from a low of $50 to a high of $5000. As a savings account, it will earn interest income, but the rate will depend on the balance you keep in the account; it will also be lower than the rate that is normally awarded to high interest savings accounts.

Instant access savings accounts are commonly used as a transaction account. If you have a high interest savings account, it is possible for you to link this account to your instant access savings account as the linked transaction account.

These two accounts may be linked even if you maintain them in different banks. However, if the two savings accounts are deposited in the same financial institution, you will have the advantage not only of instant access but also instant transfer of money from your other linked account into the instant access savings account.

Your instant access to the savings account is facilitated mainly by an ATM card, which allows you to have 24 hour access and maximum convenience. Aside from the ATM/EFTPOS access, it is also possible to enjoy telephone banking and Internet banking access.

ATM convenience is not limited to the ability to draw funds from the ATM networks operated by your bank and other financial institutions. When you have linked your accounts, it will be easy for you to make payments on your credit card through the ATMs, allowing you to save on interest through prompt payments. Other conveniences possible with the instant access savings accounts ATM are:

Making fund transfers to and from the linked accounts Making cash deposits (although this is possible only on selected ATM units) Checking the balance on your accounts

Aside from making deposits at ATMs, you may also deposit money into your instant access savings account by:

- Having your incomes credited directly
- Transferring funds from the linked account or your other savings accounts
- Transferring funds by telephone or Internet banking
- Sending cheque deposits by mail
- Depositing over the counter

For your everyday transactions, you may want to consider the conveniences available to you through instant access savings accounts.

Richard Greenwood is the author of this savings account article. He also wrties on a wide range of finance subjects including credit cards, loans, mortgages and debt reduction as well as other savings products such as term deposits.

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