Savings accounts are useful. They are usually offered by retail banks. Savings accounts allow depositors – that’s you and me – to deposit a regular amount of money into them and earn a return on the accrued balances, based on a rate of interest.
According to the website Wikipedia, “In the United States, under Regulation D, 12 Code of Federal Regulations(CFR) 204.2(d)(2), the term “savings deposit” includes a deposit or an account that meets the requirements of Sec. 204.2(d)(1) and from under the terms of the deposit contract or by practice of the depository institution, the depositor is permitted to make up to six pre-authorized transfers or withdrawals per month or statement cycle of at least four weeks. There is no regulation limiting number of deposits into the account.”
The website InvestorWords says the interest rate is a rate which is charged or paid for the use of money. Which describes perfectly what the saver is allowing a bank to do, use his or her money.
“From a consumer’s perspective,” says the website, “the interest rate is expressed as annual percentage yield (APY) when the interest is earned, for example, from a savings account or a certificate of deposit. When the interest is paid, for example, for a credit card, a mortgage, or a loan, the interest rate is expressed as annual percentage rate (APR).”
Savings accounts around the world
So what about savings accounts around the world, say in Egypt? The banks in Egypt are as modern as their counterparts in the Western world, offering the complete range of banking services you would expect, from current and savings accounts to online banking, credit and debit cards, direct debits and regular monthly account statements. In fact, nothing very much different from the services offered by banks in the United States.
Other world-wide savings accounts, courtesy of the website deposits.org:
United States: HSBC USA, for example, offers a good range of savings accounts including an online savings product account which requires a minimum of $1 to set up, is FDIC insured, has no monthly fees and offers an APY of 0.40%. Bank of America offers a regular savings account with an APY of 0.1%. But a monthly service charge may require a minimum balance to not incur a charge. A similar APY is also offered by a Wells Fargo savings account.
United Kingdom: An ING Direct UK savings account offers a variable 2.0% AER for new customers (1.98% gross p.a.) with the bonus fixed for 12 months from the opening of the account. After 12 months, the standard variable rate applies, currently 0.5% AER (0.5% gross p.a.). The rate applies on balances of up to £250,000 (just under $400,000). You can start saving from as little as £1 (about $1.60), with no minimum or maximum monthly deposits. And there are no charges for withdrawing your money.
By the way, AER means Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid at the stated rate for 12 months and compounded once each year.
United Arab Emirates: Emirates NBD, 1 year fixed deposit with an APY of 0.8750%. Minimum deposit of AED 10,000 (around $2,722) is required. A fixed deposit, or time deposit, is a deposit of money that pays higher interest than a savings account. However, conditions are imposed such as the amount and frequency of withdrawals.
Australia: UBank 1 year term deposit offering an APY of 4.85%. A term deposit is a savings account or certificate of deposit that pays a fixed rate of interest until a given maturity date.
Bangladesh: Standard Chartered Bank Bangladesh 1 year fixed term deposit offering an APY ranging from 7% to to 12.5% with a minimum term of 1 year and a maximum of 2 years.