Which savings account is right for me?
Most of us are saving up for something, whether it's a small purchase such as a new gadget, or a major investment such as a car or a house. Once you have a saving goal in place, the next step is to decide what type of savings account best suits your needs.
Perhaps you're looking to make regular deposits into your account over a long period of time, or are hoping to put a large sum of cash away immediately for safe keeping. Whatever your savings plans may be, make sure you open an account that works for you. Here is a brief overview of some of the different types available.
Regular savings account
With a regular savings account, customers are required to make a deposit every month – without fail. While the interest rates on these accounts are often very good, there can be limitations on the amount you can save per month, which is worth bearing in mind if you have a high savings goal. A regular savings account might be a good option to consider for first-time savers who want to be a little stricter with their monthly outgoings.
Fixed rate savings account
Offering one of the most disciplined ways of saving, a fixed rate savings account gives customers the chance to choose the terms of their agreement before the saving even begins – including interest rates and the length of time the individual will be making deposits. This account could be ideal if you want to leave the money alone once it's been set aside, as you won't have access to it until the term is up.
Instant access savings account
Instant access accounts are designed for customers who want the option to withdraw money from their savings whenever they like, perhaps to cover an emergency payment or settle an unexpected bill. Money can be taken out quickly and easily, usually using a card or by logging into online banking. Instant access savings accounts can be most suited to individuals who prefer to have direct access to their savings, and aren't too worried about needing to dip into them from time to time.
ISAs cover a broad range of needs, but they could be helpful to anyone looking to set aside a large amount of money. This is because they are tax free and account holders can earn interest on the money they've deposited. Cash ISAs could be a great place to start when you're saving for a big investment like a property. Tax benefits will depend on your individual circumstances.
Having a clear understanding of your savings plans could really help when it comes to choosing an account. You should think about which savings account might best suit your needs based on a number of factors, including how much you want to save, how long you want to save for, the level of access you require to your money, in addition to the interest rates available on different account types.