These accounts limit the maximum amount you can deposit per month.
They can offer a fixed or variable rate of interest and usually allow some penalty free withdrawals or early closure before the end of their term.
They usually, but not always, mature after a year.
Regular savers usually offer the top interest rates. The top easy access accounts in the UK pay 4.5%-5%, the top one year fix pays 4.53%. The top regular saver currently pays 7.5%.
Examples of regular savers are Co-operative Bank Regular Saver at 7% variable and First Direct Regular Saver Account at 7% fixed.
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I’m sure we have equivalent accounts, but not those exact ones.
We have high-yield savings accounts (HYSA) that have no withdrawal restrictions and regularly yield 4-4.5%. We have Certificates of Deposit (CD’s) that end after fixed terms and pay higher rates of interest. They sound like what you’re referring to. I’m not sure what yield that is currently.
It sounds similar to a Certificate of Deposit, but those aren’t offering 7%.
The closest US bank equivalent is probably high yield savings accounts. Rates aren’t quite that high, at least not right now, but most have no deposit limits.
There are also CD accounts, which are similar in that they mature after a set period, often a year. But those are usually a lump sum deposited that you don’t add to monthly.
No, we do not.
We have Certificates of Deposit (CDs) that sound similar.
We agree to leave your money with bank for a certain period in exchange for a fixed interest rate. A lot of these are a year, but I’ve seen them for a few months or a few years.
CDs through my bank are paying between 3.4%-3.9% depending the on length of the CD and the terms of the contract
There are early withdrawal penalties most of the time, but I’ve seen some without the early penalty.
Some people are mentioning high yield savings accounts, but those are different because there is no set holding period. The rate for HYSAs are variable based on market interest rates. The current APR for my HYSA is 3.50% and 3.80% ( I have two)
I’ve never seen an exact equivalent to what is described but it sounds like a nice happy medium between two common options: High Yield Savings (more liquid, lower rate) and Certificate of Deposit (less liquid, higher rate)
I’d definitely use a saver account if they were offered, it sounds like it would fit my needs nicely.
no direct equivalent but as others have said we have high yield savings accounts (usually you have to maintain a certain balance and are limited on how much you can withdraw at a given time) and certificates of deposit (you give the bank a fixed sum of money for a fixed term – often but not always one year – and they give it back to you at the end plus interest).
We have next to nothing. I save monthly in a tax deferred account, but it’s not much. I have a second property I’m looking to sell, but that’s not a norm. Our country sucks right now. Sorry for the Trump supporters, but it does.
Limit the maximum amount? Why?
Yeah I think so it has the same limitations very high interest rate but very low maximum contributions allowed (which kind of made it useless for me). I can’t think of the name of it though hmmm… I’ll edit this post if I can recall it.
US bank accounts sometimes have a minimum balance to avoid fees, but I haven’t personally heard of one with a maximum balance or deposit restrictions like that.
It pretty much sounds like what we call a CD except with a CD you put in a certain amount all at once rather than adding some each month up to a cap.
Also CDs don’t usually have a maximum for one person. Typically, there’s an overall maximum for how much across everyone can put in the CD before it becomes unavailable, but that’s generally a huge amount.
There’s also Treasury bills, government-backed securities with maturities from 4 to 52 weeks. You choose which one to buy and usually longer ones pay more. The rate is variable each time they do a run but it’s fixed at the time you buy them. Technically they don’t have any interest but they’re worth a certain value and you buy at a discount. Once they’re mature they’re worth the full value and you have the choice to take the money or automatically invest it back, you can also sell early for a lesser value
Treasury notes are effectively the same thing with 2-10 year maturity. Treasury bonds are 20 or 30 years. Savings bonds are similar and it used to be popular for grandparents to gift it to newborns and they came in cool paper certificates.
We have accounts that have higher interest if you keep a minimum balance.
Also certificates of deposit if you keep the money in for a certain time.
We don’t have maximum deposits. They will take as much as you have.
I’ve never heard of something with a relatively low deposit limit that wasn’t also a more tax advantage investment vehicle like a 401k or an IRA.
If you want 7% it goes in the market, not a savings account.
Not exactly the same thing, but my credit union has a savings account that pays higher interest, but only on a balance up to $10k. Any balance above that pays a lower interest rate. So rather than limiting contributions they just limit your overall balance. I assume the business case for the bank is similar (i.e. as a “loss” leader) but in this case the interest is not so high that I doubt they actually take a loss on it.
Why would the bank limit deposits?
You’re kind of described Certificates of Deposit. They’re fixed-rate with a set maturity date. There’s an early withdrawal penalty. But I’ve never heard of one with a maximum deposit.
Plus these aren’t based on a monthly deposit; the amount is fixed up front.
My bank doesn’t let you have one unless you’re already rich
there are some high yield accounts that have tiered interest rates. But in general, there’s nothing like you’ve described.
I have never heard of any savings accounts that put an upper limit on how much you can save per month. Roth IRAs and some other financial tools do have annual limits imposed by the government due to their tax implications.
The closest thing that comes to mind are “club accounts,” which are usually a high interest account that ends at a certain date. For example, a bank or credit union will have club accounts for people to save for Christmas that will last from Jan. 1 to Dec. 1, or a club account for summer vacations that lasts from September 1 to July 1. Money can only be taken out of the account before the end date at a steep penalty.
They used to be far more popular, and it was kind of like a loss leader for the financial institution (though without actual losses), in that the credit union doesn’t make much money on them, but it gives them something to advertise that will then bring in more business. My grandparents used to always have Christmas club accounts, especially since they had eight grandkids to get presents for.
These days, not many people use them or know about them. Regular savings accounts and CDs are much more popular. It’s kind of a hassle to have a pre-determined end date for an account. My credit union still offers them, but the manager says they usually set up fewer than 20 of them a year.