Finding the savings account to suit you

With so many options to choose from, selecting the right savings account can be a daunting process.

No two products are alike and consumers must be aware of the terms and conditions associated with each in terms of access, interest rates etc.

There are also various ways to save depending on your savings objectives and you need to find the right product for you.

Here are some of the main types of savings account, along with a short explanation of each.

Hopefully, this will help you to determine the right account for you in respect of your savings goals.

Instant access account

Allows you to take your money out at any time. Typically, you only need a small amount to open one (often just £1) and you can withdraw your savings whenever you wish. These accounts normally offer low interest rates.

Notice accounts

Before you make a withdrawal, the account provider usually needs notice of between 30 and 120 days. These accounts often offer higher interest rates than instant access accounts. Taking your money out before the notice period could lose you interest. You may also be required to deposit a higher amount to open a notice account.

Regular savings account

Usually requires a monthly deposit for an agreed period of time. The upside is that you often get higher interest rates. To benefit from the higher rate, you must deposit regularly or lose it. There may also be a limit on the number of times you can withdraw money.

Fixed rate account/fixed rate bond

Requires a single lump sum deposit for a set period of time, normally one to five years, or longer. A guaranteed fixed interest rate is usually applied so you’ll know how much you’ll earn. Withdrawals are not permitted until the fixed term is up. If, however, you decide to withdraw, you will lose some of the interest and may also have penalties to pay.

Individual Savings Account (ISA)

Allows you to save without tax being deducted. There are different types of ISA, including easy access ISAs, fixed rate ISAs and stocks and shares ISAs. Savings are tax free and can be made either in regular payments or one-off lump sum deposits. Savings is limited £20,000 per person in each tax year.