Voluntary accumulation plans Also known as the Personal Security Program. In essence, the program requires the depositor to indicate his willingness to save regularly for a period of fifty months in order to reach a specified savings goal of from $100 up.
The advantages of the plan are that, while no penalty is attached to the individual who fails to complete it, the existence of the plan encourages the individual to save who might otherwise allow money to run through his fingers. The plan is insured, so that if the planholder dies while still saving, his estate will receive all he has paid into the plan, plus the full amount of his objective, plus a small cash bonus. The insurance is free, and does not depend on a medical examination. Payments may be made automatically from the plan holder's ordinary account, and he may stop the plan at any time and take out the money he had paid in, plus a small cash bonus and minus small charge for the bank's services. The plan is available for children as well as adults.
The disadvantages of the plan are that the effective rate of interest is low and that only individuals between the ages of six and fifty-six can participate. Although the plan has a low effective rate of interest, its stark simplicity has much to commend it. It should certainly be considered as a sound method of reaching a short term savings objective.