P566ORACLE 566 Mon20 Jan C4 1713:17
1/5
THE A-Z OF
INVESTMENTS
H is for high-interest cheque accounts
Remember the days when you kept large
sums of money in your bank cheque
account at no interest but paid whack-
ing bank charges for the whole quarter
whenever your balance dropped below the
£100 free-banking limit?
Now most banks are offering free in-
credit banking and, if you have a min-
imum of £1,000 to invest, you can even
open a high-interest cheque account and
get paid interest too.
more follows >
Your Money ...560 Feature ...567
CADBURY'S CHOCOLATE RECIPE 184 (ITV)
P566ORACLE 566 Mon20 Jan C4 1701:11
2/5
THE A-Z OF
INVESTMENTS
When, in April last year, the banks
were obliged to come into line with
building societies and started paying
interest with basic rate tax deducted,
their rates didn't look too competitive
It was then that high interest accounts
took off.
You can open a high interest cheque
account with a minimum of £1,000 to
£2,500 and get a cheque book with which
to make withdrawals. Most accounts set
a minimum withdrawal of £200-250 per
cheque, although the Co-op Cheque Save
account is an exception with no mini-
mum amount.
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Your Money ...560 Featuqe ...567
P566ORACLE 566 Mon20 Jan C4 1712:41
3/5
THE A-Z OF
INVESTMENTS
It's always worth comparing charges
when deciding which high interest
cheque account to go for. Some will
allow you any number of free cheques,
others will make a charge.
Barclays Prime Account, for example,
gives you 6 free cheques a quarter but
anything over this and you pay 50p a
time. The M & G account, linked to
Merchant Bankers Kleinwort Benson
offers unlimited free cheques as does
the Co-op's Cheque Save account ─
although Co-op customers pay a monthly
service charge of £3.
more follows >
Your money...560 Featuqe...567
P566ORACLE 566 Mon20 Jan C4 9702:08
4/5
THE A-Z OF
INVESTMENTS
The interest paid on high interest
accounts can go up or down depending on
what's happening in the City money
markets. The recent rise in base rates
is good news for savers. Many accounts
have put their rates up. Barclays Prime
Account is now paying 9.125% on
balances over £2,500, for example.
Beware of letting your balance drop
below the minimum amount for higher
interest, however. Anything less than
£2,500 in that same Barclays account
and the interest drops to less than
the 6½% you'd get in an ordinary 7-day
deposit account.
more follows >
Your money...560 Featuqe...567
P566ORACLE 566 Mon20 Jan C4 1715:44
5/5
THE A-Z OF
INVESTMENTS
Like the building societies, the banks
now deduct basic rate tax before any
interest is credited to youq account
and it can't be rescued from the taxman
So, by investing their money in a high
interest cheque account, non-tax payers
are literally throwing 30% of their
interest away. They'd do better putting
spare money where interest is paid
gross ─ in a National Savings account,
for example ─ and using an ordinary
current account for day-to day cash.
Next week: I is for Investment Trusts
more follows >
Your Money ...560 Feature ...567