Chances are, if you’re reading this, you have a little money to save and even less to spend on your next vacation or dinner out with friends. So how do you make saving money fun and exciting?
One of the best ways to make saving more palatable (and enticing) is by setting up a help to save account that offers tax-free savings for savers who meet certain criteria (e.g., the government will give savers at least 50% of the annual interest earned).
Here’s everything you need to know about help to save accounts so you can start putting away cash today.
The most important thing about Help to Save
There’s just one important thing you need to know about Help to Save and that’s that it’s a type of savings account. What does that mean? It means money goes in, but it doesn’t come out!
Okay, it does come out when you take your savings as cash. But everything else is as easy as setting up a standing order for an amount of your choice every month and then forgetting about it because your money will always be there ready for when you need it.
Even if you join without any intention of saving some or all of it, simply leaving the small amounts in there can prove useful later on should something unexpected arise, like a old boiler breaking or a washing machine turning up on eBay at an unbeatable price!
How does Help to Save work?
Help to Save works in two parts:
(1) a guaranteed bonus of up to £50 per month and
(2) an opportunity for 1% interest on balances between £1 and £50,000.
Under both elements, those who successfully apply will receive 25% match funding from The Treasury.
This means that if you put in up to £50 per month over four years you'll receive a matching sum from The Treasury and your Help to Save account balance will be boosted by up to £3,000 at current rates.
To qualify for any of these funds, you need simply make regular monthly deposits of at least £25 over a three-year period.
Find out if you can open a Help to Save account
To open a Help to Save account, you’ll need to be eligible for government support and in work. To find out if you can open an account, check whether you meet these conditions.
You might also like to know how your savings are protected before you sign up – read our guide on Savings accounts if you want more information.
Remember that if there’s no Help to Save account available where you live now, but one becomes available later in your area, then when it does start, you can transfer your balance over as long as it is within 2 months of opening.
Choose which Help to Save savings account you want
The Help to Save accounts have an interest rate of 1.5% on balances up to £2,400; and a rate of 1.0% on savings over £2,400 up to £12,000.
So, it’s pretty simple: if you only want small amounts in your Help to Save account(s), you can deposit as little as £1; but if you want more than that in one place (up to £12,000), you will have a slightly higher rate (1%).
If you're tempted by that 1.5% introductory bonus for new savers (but don't think you'll keep saving) go for it!
Set up your Direct Debit and manage your payment schedule
When setting up your Direct Debit, you'll need to provide some personal information about yourself. This will include your name, address and payment amount.
You'll also be asked whether you want to pay by standing order (which runs on a specific day each month) or continuous payment authority (for one off payments).
Direct Debits are a great way of saving money without having to think about it – simply set up your Direct Debit and watch your savings grow!
Learn how you’ll be paid when you withdraw funds from your account
If you plan on relying on your savings in an emergency, it’s important that you learn how your money will be available when you need it.
That’s why they created the help-to-save account: You can easily log in and see exactly what will happen when you withdraw funds from your Account for any given month.
Access Help to Save on the go with the app
Help to Save (HTS) is a government savings scheme designed to help people on low incomes save money. If you open an HTS account with one of our partners you'll get an interest payment of 50p for every £1 you save.
Just transfer money into your Help to Save Account and watch it grow. You'll also benefit from free, independent financial guidance – helping you reach your goals quicker and easier.
Submit an application online - it’s easy!
Many accounts come with a step-by-step application form you can fill out online. This is a great time saver, especially when you have to apply for multiple accounts at once.
And if you already have an online relationship with your bank (e.g., you have a credit card with them), applying for an account is even easier.
Help to Save Account Explained - The Bottom Line
Saving money is can be harder than it sounds. But with a few simple strategies, you can reach your financial goals.
For instance, if you’re saving for a car, set up an automatic transfer from your checking to savings accounts and then increase it over time as more money comes in.
Or if you’re saving for college, work with your employer to set up an automatic payroll deduction so that saving isn’t just another bill you have to worry about paying every month. It may take some discipline on your part—if it didn’t, it wouldn’t be called saving.
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