The Easiest Passive Income Stream for Beginners (2023) | High Interest Savings Accounts
Published: 2021-12-29
Status:
Available
|
Analyzed
Published: 2021-12-29
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
Saving £10,000 in a high-interest savings account at 2% interest will yield £200 in one year, compared to £10 in a traditional savings account at 0.1%.
"say you have ten thousand pounds saved in a traditional savings account at 0.1 interest then after one year you would have earned 10 pounds now say you decide to open up and save that 10 000 pounds in a high interest rate savings account at 2 interest then after 1 year you would have made 200 pounds"
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Setting up a high-interest savings account takes five minutes and helps protect money from inflation.
"so by taking out five minutes to set up a high interest rate savings account you're protecting your money and offsetting them out that your money is losing out to inflation"
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Notice savings accounts are currently offering around 1.1% interest.
"notice savers accounts are currently paying around the 1.1 mark"
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Fixed rate savings accounts are currently offering around 2% interest.
"fixed rate options are currently paying around the two percent mark"
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Cash ISAs, which can be fixed rate or easy access, are currently paying around 1.5% interest and are useful for long-term savings.
"and then you have cash license which i mentioned earlier these are also useful if you're looking to save for the long run they can be fixed rate or easy access savings account and they're currently paying around the 1.5"
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Easy access savings accounts allow for funds to be accessed at any time.
"easy access savings account which i can tap into at any time"
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Fixed rate savings accounts allow users to lock in higher interest rates.
"then i put some of my cash into a fixed rate option where i can lock in those higher rates today"
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When choosing a high-interest savings account, prioritize accounts with zero maintenance fees over simply the highest advertised interest rate.
"first it's the interest rate don't necessarily go for the highest paying interest rate there may be some other fees that are associated with it so you're ideally looking for one that has zero maintenance fees"
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Look for high-interest savings accounts that offer a long period of high rates, rather than introductory incentives that decrease over time.
"there are also banks and providers that provide you with a high interest rate to start off with as an incentive and then reduces below the average after a certain amount of time so ideally you're looking for one with a long high interest rate period"
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Be aware of cap amounts on interest earnings (e.g., 1.5% or 2% on savings up to £2,000). For savings above the cap, open additional accounts to maximize interest earned.
"the second thing you need to look out for is the amount that you could earn the money on usually there's a cap amount so you could earn for example 1.5 or 2 interest on your savings up to 2 000 pounds if you have savings above that 2 000 pounds it makes sense for you to open up another bank account for your savings above that 2 000 pounds so you can maximize the interest you are able to earn"
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Nationwide Flexclusive and Virgin are mentioned as higher-paying options for savings accounts in the UK.
"nationwide flex claro and virgin are some of the few"
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Investing money into stock market-linked accounts is recommended for funds not needed for the next five years.
"i've also invested my money into accounts linked to the stock market this is especially useful if you're not looking to touch that money for the next five years"
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The speaker earned £200 in passive income from a high-interest savings account in less than five minutes of setup time.
"last month i made 200 pounds from my high interest rate savings accounts which literally took me less than five minutes to set up"
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Saving £10,000 in a high-interest savings account at 2% interest yields £200 in a year, compared to £10 from a traditional account at 0.1% interest.
"say you have ten thousand pounds saved in a traditional savings account at 0.1 interest then after one year you would have earned 10 pounds now say you decide to open up and save that 10 000 pounds in a high interest rate savings account at 2 interest then after 1 year you would have made 200 pounds"
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Funds deposited in FCA-regulated banks or accounts are protected up to £85,000.
"if you put your money into a bank or an account that's regulated by the financial conducts authority that means your money up to 85 000 pounds is protected"
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Basic rate taxpayers earning up to £50,000 can earn up to £1,000 in interest tax-free.
"if you're a basic rate taxpayer earning anything up to 50 000 pounds then the interest you earn up to 1 000 pounds is completely tax free"
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Higher rate taxpayers earning between £50,000 and £150,000 can earn up to £500 in interest tax-free.
"if you're a higher rate taxpayer only between 50 000 and 150 000 pounds then the interest you earn up to 500 pounds is completely tax free"
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Cash ISAs allow for tax-free interest on up to £20,000 deposited annually, regardless of personal income.
"and you're able to put in 20 000 pounds in there every year and any interest you earn on that 20 000 pounds is completely tax free regardless of your personal income"
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Inflation is approximately 2-2.5%, meaning prices increase by that percentage annually.
"inflation is currently around the two 2.5 mark which essentially means that stuff costs two percent more than it did the year before"
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Easy access savings accounts are currently offering around 0.6% interest.
"easy access savings account and these are currently paying around the 0.6 mark"
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Notice savings accounts are currently offering around 1.1% interest.
"notice savers accounts are paying around the 1.1 mark"
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Fixed-rate savings accounts are currently paying around 2% interest.
"fixed rate options are currently paying around the two percent mark"
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Cash ISAs are currently offering around 1.5% interest.
"and they're currently paying around the 1.5"
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When choosing a high-interest savings account, prioritize accounts with no maintenance fees.
"so you're ideally looking for one that has zero maintenance fees"
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Be aware of introductory high interest rates that may decrease after a promotional period.
"also banks and providers that provide you with a high interest rate to start off with as an incentive and then reduces below the average after a certain amount of time"
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Some savings accounts offer a cap on the amount of savings that will earn the stated interest rate, for example, 1.5% or 2% on up to £2,000.
"usually there's a cap amount so you could earn for example 1.5 or 2 interest on your savings up to 2 000 pounds"
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Ensure that any bank or provider offering savings accounts is regulated by the FCA for protection.
"make sure that that bank or provider is fca regulated"
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Nationwide Flexclaro and Virgin are mentioned as higher-paying savings account providers in the UK.
"there are higher paying ones in the uk uh nationwide flex claro and virgin are some of the few"
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