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Information on Fixed Deposits Accounts

Fixed deposits have been a popular way to accrue savings for years. Whether you are saving for a future wedding, a deposit for a house or saving for your retirement, there is a fixed deposits account available to suit your needs. However, the high interest rates offered by financial institutions do come at a price.

When taking out a fixed deposits account you are required to sign an agreement stating you will not withdraw any money for a set period of time. This can range from three years right up to ten years, depending on the account you choose.The amount of interest your fixed deposits account earns depends entirely on how much you invest and for how long.

As part of the agreement if you need to make a withdrawal you are subject to a penalty payment, which is usually the amount of extra interest your account has accrued. Most banks will pay standard interest rates on early withdrawals. If you decide you want to withdraw your money earlier than arranged your bank will require written notice some time before you want the money. The notice period does vary, but is usually somewhere between 60 and 90 days.

Virgin money currently offers a competitive fixed deposits arrangement. You can bank up to £10,068 a year tax-free and enjoy high interest rates too. Virgin currently has around £2.2 billion invested with them, proving their rates are hard to beat. The National Westminster Bank offers a similar deal to Virgin money and they also have the option of a penalty-free withdrawal after a certain amount of time.

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