Types of savings accounts: your guide
Find out all you need to know about different types of savings accounts
There are so many types of savings accounts available and deciding on the right one for you can be difficult.
It’s a good idea to find out more about what’s on offer before choosing the right savings account for you
Access your savings at any time
You never know what’s around the corner so if you think you’ll need to dip into your savings at some point, you’ll need an instant access savings account.
If you want to pay a fixed amount into your savings each month you can open a Monthly Saver account. You’ll pay in a set amount by standing order and you won’t be able to pay in anything more.
If you want to be more flexible with your savings, there are plenty of accounts which let you pay in as much you like, whenever you like.
With an Easy Saver or eSavings Account, transferring money into your savings is easy. You can open an account with an initial deposit of £1 and manage the savings account online so you can make transfers at the click of a mouse.
So if you have some money spare at the end of the month, why not transfer it to your savings account and start earning interest.
Don’t pay tax on your interest
You can avoid paying tax on the interest you earn by opening an Individual Savings Account (ISA).
You’ll be able to pay in money whenever you like, up to a limit set by the Government for each financial year.
You can open a Cash ISA with as little as £1 and you’ll be able to pay into your ISA and withdraw money whenever you like.
If you already have some savings available, you could take advantage of higher interest rates by opening a Fixed Rate ISA. You’ll need to deposit £3,000 to open the account and you can pay money in whenever you like up to the limit set by the Government.
The interest rate is fixed for 2 years and it’s a good idea not to withdraw money in that time as you will be charged.
Protect your savings for a fixed period
If you’re saving for something special, you might want to choose an account that doesn’t let you withdraw your savings for a set period of time.
With a fixed term savings account, you choose how long you want to save from 6 months, 1 year, 2 years, 3 years or 4 years. You’ll only be able to withdraw your money when that time ends.
It’s a great way to make sure you don’t dip into your savings to pay for everyday things.
To take advantage of the higher interest rates with these accounts, you’ll need a deposit of £2,000.
You can also choose how your interest is calculated. With a Term Deposit account, you’ll get a fixed interest rate throughout the length of the account.
Or, if you want to tie your interest rate to the Bank of England’s base rate you can choose a Savings Tracker Bond
You’ll get an interest rate guaranteed to be a fixed amount above the base rate. So when the Bank of England’s rate changes, so does yours – and it will always be higher.
