The savings account you can open with £1 – and it could net you a £4,000 bonus

SAVVY savers could open a bank account with just spare change in their pocket and benefit from THOUSANDS down the line.

Opening a Lifetime ISA (or LISA) means you get paid for hiding your money.

The savings account allows you to get a 25% bonus from the government on any money set aside for a first home or retirement.

If you put £4,000 into the account (the maximum amount allowed each year), you will receive an additional £1,000 as a bonus.

But even if you can’t afford to save that much, you can still get a 25% bonus on what you save.

So if you put in just £1 you will get an extra 25p after a year.

But if you managed to put the maximum in for four years, your bonus would be £4,000.

Your allowance resets at the start of each tax year, so every April 6 you can add another £4,000 – if you have plenty to spare.

But you can also only open a LISA if you are between 18 and 39 years old.

Financial experts like Martin Lewis have encouraged the move in the past – since it’s so easy and cheap to open one, you have nothing to lose.

If you invest a pound now, even if you are not yet thinking of buying a house, then the countdown begins for your bonus.

The account must be open for at least one year before the bonus is also added, so it’s a good idea to start as soon as possible.

But, it is important to only save money that you can afford to save.

This is because money in the savings account can ONLY be used for your first home or retirement.

There is a penalty of 25% of the amount withdrawn if you use the money for something else.

There are other benefits to opening the account though, so you’re not just sitting around waiting for the extra cash to arrive.

You earn tax-free interest on everything you save plus the bonus.

How to increase your money with a Lifetime Isa

As with other forms of Individual Savings Accounts (ISAs), the LISA comes in two forms, cash LISAs or equity and stock LISAs.

Stocks and stocks can be risky and your invested money may go up or down, but could make your money do more in the long run.

A cash account, on the other hand, will pay a fixed rate of interest like a savings account.

There are, however, a few additional rules to be aware of when it comes to withdrawing your money.

If you’re saving for a first home, you’ll need to buy a property that costs £450,000 or less to qualify for the bonus.

You cannot be a cash buyer and the mortgage cannot be a buy-to-let transaction.

And if you put money aside for your retirement, you will not be able to withdraw money from the savings account until you turn 60.

It may be a long wait, but the bonus is paid out every year you save something in the savings account, and it will continue until you reach age 50.

So you could get up to £32,000 if you opened an account at 18 and continued to build your savings up to the maximum age.

Remember to shop around for the best LISA rate.

You’re not tied to a single provider, so if you have an account you can always search for the best rates.