Choosing an Account
Choosing the best savings account for you…
We all want to make the most out of our money, but with so many savings accounts on the market, how do you find the best place to save it in? There's more to think about than just the interest rate, so to help you choose the right account for your savings, consider the following tips:
Protect your savings – The Government protects up to £50,000 of UK savings per person, per account, so it is a good idea to spread your money if you have more than £50,000 to save. But, if you have accounts with different banks, be careful if they are owned by the same banking group. This is because, depending on how they are licensed, all the accounts that you have with a single banking group could be counted as one, meaning that one limit of £50,000 could be applied to all of your accounts. Also, beware when a bank is owned by a foreign financial services group, as this might mean that it comes under foreign compensation rules, not British ones, and your savings could be vulnerable if the bank collapses.
Find a competitive interest rate – Once you have found the savings accounts that offer a safe haven for your money, you will want to know that you are getting good returns with a good interest rate. There are lots of different savings accounts to choose from, depending on how long you want to save, how regularly, and if you are willing to not make withdrawals in return for a higher return. Some offer a higher rate the more money you have in there, while others offer more for making regular monthly deposits. Choose the one that best reflects your savings habits and needs.
Decide how much access you need to your money – If you want to stash your money away for the long term, you can earn more interest and also avoid interest penalties by not making any withdrawals. If you expect to need access to your cash, you can choose an instant access saver, or if you think you can predict when you will need to make a withdrawal, go for an account where you can give the bank notice and avoid interest penalties.
Choose how to operate you account – If you're not internet savvy and prefer a traditional method of saving, you can opt for a savings account that can be managed by telephone or post, in branch, or a combination. Alternatively, you could opt for an online savings account, usually offering a higher rate of interest, which allows you to manage your account at any time of the day or night 365 days a year, view your statements and transactions, transfer money at the click of a mouse, and watch your savings grow.