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Other Bank and Building Society Accounts

BANK and BUILDING SOCIETY

Postal or Phone Account

(Also known as 1st Class Instant, Postal Deposit, First Instant, Select Instant)

An account which pays a good interest rate and where you can withdraw immediately, generally without notice or penalty but only by post or phone. Deposits generally also have to be made by post. You lose interest while your cheque is in the post, possibly for up to a week if you receive a cheque before the weekend and can't pay it into another account until Monday.

Many accounts can be operated by phone. The rates on these accounts may be excellent when you invest but they often don't stay that way. Also almost all the best accounts now include an "introductory bonus" which usually lasts no longer than a year and may only last a month or two. It is unlikely that your account will continue to pay a top rate, so you will need to switch to another account which does. Also watch out for restrictions on the number of withdrawals or complex penalties.

Who can invest Anyone.

How worthwhile Good value for readily available money. Perhaps better value if you make few transactions as you lose intrest while your cheque is in the post. Compare with Bank and Building Society On-Line Deposit Account, Offshore Bank Instant Access Account. For small amounts, see Bank and Building Society Cash Card Account. Would suit you if you don't like using on-line banking

Minimum £1,000 to £10,000.

Maximum Usually none. Some are open for deposits from new customers for limited periods only.

Suitable Lump sums.

Money back Usually a few days. You fill in a form and post it back to the bank or building society which posts you a cheque by return.

Interest Variable. More interest sometimes paid for larger amounts, e.g. when over £5,000, £10,000, £25,000, £50,000, £100,000. Most of the best value accounts, include a bonus which may amount to a penalty in some circumstances. Direct Line operates a system where several accounts held by friends or relatives can be pooled so the sum of the combined balances determines the interest rate paid.

Interest paid Usually yearly. Direct to a bank account, or left to accumulate. Cheltenham & Gloucester pays on the anniversary of opening the account. Some also pay monthly but at a lower nominal interest rate and may require 30 days notice, see Bank and Building Society Monthly Income Account.

Tax 20% tax is deducted from the interest. Non-taxpayers can reclaim the tax from the Inland Revenue (or have interest paid with no deduction). Higher rate taxpayers have to pay extra tax; basic rate taxpayers don't.

Fees to pay Usually none. Nationwide InvestDirect charges 50p for each cashcard withdrawal at a Nationwide machine and £1 at another machine. Bruistol & West allows 6 free withdrawals a year.

Passbook Statement usually sent with each transaction or yearly.

Children Unsuitable.

Risk 100% compensation scheme on the first £35,000 since 1 October 2007 for each investor in each licensed bank or building society under the investors compensation scheme.

How to invest Phone one of companies listed below at their special 'By Post' phone number.

Where from Best rates at : Click here for the best rates.

Other Bank and Building Society Accounts

Last updated 15 December 2007.