What Is a Recurring Account?
People have all sorts of accounts. Most everyone has checking accounts, savings accounts and some people have recurring accounts. All of these accounts allow owners to save and spend money pretty much as they please. Recurring accounts are a little different in that they mostly involve deposits. A recurring account allows people to save money for a longer period of time without withdrawing the money before a certain time.
Other People Are Reading
-
Definition
-
A recurring account is one in which people who want to save money will deposit a set amount each month. You must deposit into this account each month in order to receive the most benefit. The more money that is in the account, the more the interest will accrue. These accounts work well for people who know they will need a large amount of money within a certain length of time. Perhaps your children will attend college in five years and you haven't done anything to save. This will allow you to save at least a little money each month to prepare. Buying a house in a set number of years is another good reason to start a recurring account for that down payment.
Where
-
A recurring account is different in that not only banks offer them, but in some countries, the post office does as well. Go to any local bank and ask for an application for a recurring account. Have the first month's deposit with you. Choose the amount that you want to deposit each month, which is normally a few hundred dollars per month. Some banks require a minimum of $500 to open the account but will allow deposits of only $100 afterwards. Check with your local bank to see what their requirements are. Once you set the amount for the monthly deposit, you cannot change it for the length of the account.
-
Length of Time
-
The length of time that you invest in a recurring account can vary. Some banks allow you to have an account for as little as six months. The normal times are anywhere from one to five years but all the way up to 10 years. This allows the investor to save up money and then be able to withdraw a large amount at one time. The length of time you have a recurring account for is determined at the opening of the account.
Interest Rates
-
As with interest rates for all other kinds of accounts, the interest you accrue on your recurring account will vary. The interest amount depends on when you open your account. Expect interest payments four times per year.
-
