Requirement Linked Accounts Flashcards
What is a requirement linked account?
A bank account that offers a higher - than - average headline rate of interest but with certain conditions.
What are some examples of the conditions?
Requiring an account holder to retain a certain balance in a separate low interest current account
To ensure a certain regular amount is deposited each month. eg. £1,000.
Will higher interest be applicable for the full length of the account lifetime?
No - it is usually only applicable for the first year and there may be a limit to the amount that can be paid in.
Why is it important to pay attention to the AER?
Requirement to hold a balance in the lower earning account means overall rate of interest on the balance held across both accounts will be lower than the headline rate.
What does checking the AER allow customers to do?
To consider whether this is a good deal or not.
