When you want to save money using savings account, you will be surprised to find that so many options exist today. You can open an account with a regular bank, choose online savings accounts, or just use a post office savings account. All these options have their own advantages and disadvantages but usually all of them offer similar benefits with the exception of interest rates that happens to be different for different accounts.
Unlike other accounts, post office savings account is a little less popular. Many people haven’t heard about it or even if they have know about it, they haven’t probably tried looking into it. Post office savings account usually offers the same features as you get with other regular accounts. On top of that, Post Office savings accounts are protected by the Financial Services Compensation Scheme which makes it an excellent option for savings.
Post office savings account isn’t just a simple savings account. You can open an account that doesn’t put any restriction on the maximum number of transactions or you can choose an account type that locks your money for a specified period. You won’t be able to make any transactions during this period to get the maximum yield on your savings. Similarly, some post office savings account have the option to open Individual Savings Account (ISA). You can get the best interest rates on these ISA accounts.
If you’re looking to save money for the future (your children or other long-term financial goals), then post office savings account is going to prove handy. You can open an account for your children that won’t allow any transactions until the expiry of the period. Similarly, you can find various short-term and long-term saving plans from post office.
Post office saving account isn’t just limited to ISA but you can also use fixed rate bonds, regular savings, and easy access accounts. All these accounts offer excellent options for saving money. However, there is a downside of opening post office savings account. Most of the times, you won’t be able to enjoy unlimited withdrawals since most post office accounts have limitation on withdrawals so that you retain a minimum balance, which is necessary to get the expected interest rate on your savings.
If you want to stay away from these limitations and still want to have a post office savings account, you can try the Online Saver account. This type of account is similar to online savings accounts offered by banks. There is no limitation on transactions, you can enjoy 24/7 support, and the minimum balance required to open the account is typically $5 or $10.
The best option for post office savings account is fixed rate bonds. These bonds have fixed interest rate over a pre-determined term of the bond. The longer the term, the higher the interest rate that you will be getting on your savings. These accounts always offer higher interest rate than easy access accounts.