Contractual Savings Plan 

Definition of Contractual Savings:

Savings made on a continued basis as part of an agreement. For example, people with an interest only mortgage, may make an agreement to save a certain amount in order to be able to pay back the mortgage capital.

Contractual savings are designed to ensure a minimum level of spending; they can help people with low self discipline for savings. Contractual savings schemes usually have a penalty for stopping paying into them.

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