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Dream cars are a question of personal taste. Some are thrilled by the exciting curves of a Lamborghini, Porsche or Ferrari. Others seduced by the cool and futuristic appeal of an Audio. And yet others have fallen in love with the charm of a Mini Cooper. Whatever your preference, however, you should make sure you have the right bank account to make your purchase a success. When thinking about how to afford your dream car with the right bank account and searching the many option available, the main consideration should be whether you’re saving long term or short term. Finding the right bank account can often be confusing due to the amount of terms and conditions, incentives offered, and changing chargers. When choosing a bank account, consideration must also be given to what type of person you are in regards to whether you’re in credit or always overdrawn. None of this is particularly complicated in itself. But the amount of aspects you have to take into consideration does mean that you need to invest a reasonable amount of time into finding the account that’s right for you.

Profitable and easy

Switching from an old bank account to a new one can be profitable and easy. Direct debits and standing orders can be transferred automatically by the bank and when you’re in credit this can earn you hundreds of pounds. Banks want their new customer to deposit a certain amount each month, preferably their salary. A credit score must also be passed. For each deposit an earnings threshold is calculated and interest paid on that. Money can be taken out once it is deposited. Taking out money already deposited and then putting it back into the account will raise the earnings threshold.

Different accounts, different benefits

Let’s now have a look at the different account types at your disposal:

  1. Deposit accounts are usually used for short term savings where the money will be needed within five years, and the money is safe. This type of account earns less interest and can be easily withdrawn.
  2. Saving with a building society or bank account will earn interest either as a fixed rate or variable rate. A fixed interest rate stays the same over time. Variable rates of interest go up or down. Saving this way is the safest, as the amount being saved is guaranteed to be at least returned. In the advent that the building society or bank goes out of business, the amount is still guaranteed up to £85,000 minimum.
  3. Money saved in building societies or banks long term may decrease if the interest earned is less than inflation increase, resulting in fewer saving in the long term. High rates of interest can be achieved with notice accounts. These accounts require a notice in advance before money is withdrawn and a close eye kept on them to make sure that the best rates are applied.
  4. Building societies and banks offer accounts designed for the lump sum saver offering higher interest rates. These are particularly good when still thinking about what the money will be used for. Some lump some higher interest rate accounts may allow the addition of smaller payments. The higher rates offered may be for a limited time only so the money will have to be moved around to find the best interest deals.
  5. New, progressive financial institutions are offering a new type of account, referred to as bad credit bank account, guaranteed account or as an eccount. These are ideal for anyone who would like to keep costs down to be able to afford their dream car, since they do not allow customers to spend more than what’s on the account.

Depending on your financial possibilities and your personality, you may arrive at very different choices. One thing’s for sure, however: Getting yourself the car of your dreams will require being strict with yourself and sticking to your resolutions. Which means you shouldn’t just get yourself the right bank account – but the right friends to support you all the way.

Originally from Liverpool, London-based economics expert William Masters has established himself as a respected journalist for a wide range of print- and online-publications.