Withdrawing interest from savings accounts

Withdrawing interest from savings accounts

15 August 2008

If you use the interest from savings accounts as a regular part of your income, then you will need to be careful not to withdraw an amount that will overly reduce the value of your original deposit. As time goes on, inflation causes the value of money to decline, although generally not at a particularly high rate. High interest savings accounts, such as those offered by many online savings accounts, will often provide an interest rate that keeps well ahead of inflation. If you want your nest egg to continue to provide a similar value of income in the future, then it is necessary to ensure that you do not withdraw too much interest.

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