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SAVINGS ACCOUNTS INFORMATION

Below you will see information on Savings Accounts.

        

SAVINGS ACCOUNTS

What is the best way to save? If you want to put money aside safely then a savings account is ideal. You might want to save for a new home, holiday, wedding or even a car. Considering today's climate it is more important than ever to get a good deal on your savings to ensure the money you put aside is in the right place.

Whatever you want to save for you need to make sure you are getting the best interest rates available on the market. Savings account comparison allows you to find the best account tailor made for your saving needs. With so many types of savings accounts out there how do you choose the best one for you? Below you will find some important information on the different types of savings account offered in the UK. Always choose an account that suits your saving needs and make sure you fully understand the account before you invest.

Savings Account (Standard)

Standard savings accounts are a great way of saving for the future or to prepare for any unexpected emergencies, but you want to make sure that you are getting the most out of your savings. In most instances the money you put aside builds up interest and the interest rates will be the main focus when choosing a savings account. Because savings accounts are designed to hold the money that you do not need immediate access to, these accounts will have higher interest rates.

You should make sure you understand the restrictions of the account. In terms of disadvantages you may be charged for withdrawing money but in most cases you can withdraw money from a standard savings account at any time.

Easy Access Savings Accounts

Easy access savings accounts, also referred to as instant access accounts are ideal for those who want to put money aside but need to be able to have direct access to their savings. As the name suggests these accounts allow easy and flexible access to your money without notice or penalty. But, this instant access to your funds does make the interest slightly lower than other savings accounts.

Some banks will offer good interest rates for these accounts to entice new customers, but will lower the rate shortly after so it could work in your favour if you are willing to move your money around in return for the best interest rates available. With this in mind you should also look at whether the interest rate is fixed or variable before you open the account.

Internet E-Savings Accounts

If you want to solely manage your account online then you should consider an internet savings account that allows you to manage your savings online. The great thing about these accounts is that they are flexible and convenient; you can access and manage your account and make transfers anytime and you are always in control of your savings. In some cases they offer more competitive interest rates because of the lower administration costs involved but interest rates are variable so it will be worth your while to compare different accounts.

There are different features of internet accounts such as instant access or fixed rates so you should shop around to find the best account for you. Please note that in order to withdraw cash you will have to transfer money into your current account but some may provide a cash card.

Fixed Rate Savings Account

With these accounts the interest rate is fixed for a set period and you cannot access your money during the set time; usually the longer the set time the higher the interest rate. They are a good way to save for the future because you will know exactly how much interest the money will earn. Another benefit is that you do not have to worry about the interest rate being cut which is particularly comforting considering today's economic climate. In some instances you may be able to make a withdrawal but if you do you risk losing some of the interest. With this in mind these fixed rate accounts are mainly for people who know they will not need access to the money for a few years.

The drawback of these accounts is that although your interest rate will not drop you could miss out on any increase in interest rates. This means that there is a certain level of risk involved so it pays to search around to find the account with the best interest rate. Furthermore, many of these accounts will require a minimum deposit which can be high.

Term Deposit Savings Accounts

Term Deposit Savings Accounts are perfect for those who like to know the exact amount of interest they are going to earn and for those who do not need access to the money during the term of the account. The interest rate is guaranteed and will not change throughout the entire term of the investment. Most term deposit accounts allow you to choose if you want the interest paid monthly or annually and also how you want to have your interest paid. These accounts are flexible because you can chose the term that best suits you which can be anything from one month to five years and you are also offered a range of reinvestment options.

In most instances withdrawals or additional deposits will not be allowed but you can hold more than one term deposit at anytime. You should make sure you won't have to access the money because you could risk losing the high interest rate. The longer the term set the higher the interest rate so for short term investments these types of savings accounts may not be the best option.

Offshore Savings Accounts

Offshore savings accounts enable Britons to deposit money outside of the UK and are for those who work or travel abroad or for anyone who wants to open an offshore account. Most offshore centres are based in the Channel Islands and the Isle of Man but there are other locations worldwide. Offshore savings accounts work and can be used much the same way as standard savings accounts based in the UK. There are different types of offshore savings accounts so you should find the one that is right for you. One advantage is that you can deposit money in a variety of currencies which can be particularly useful for those who earn income overseas. Another benefit is that you don't have to switch your account is you move to another country.

In some cases you may find a minimum deposit is required that is generally a lot higher that a UK savings account and some of these offshore accounts can have hefty charges. You should look how you access your account and whether there is a maximum allowed in the account. Also remember that offshore accounts are not tax free and you must declare any savings income on your annual tax return. On a final not most offshore savings account are not covered by UK laws which guarantee compensation in the event that the bank is unable to guarantee customer deposits. However, the countries which the accounts are based may have their own compensation guarantees so it is worth considering this when choosing your account.

Children Savings Accounts

If you are considering investing in your child's future then should consider opening a children's savings accounts. With university fees and accommodation prices on the rise a savings account could give them a good financial standing when they need it. In general children's savings accounts work like adult accounts but some have schemes that specifically designed for children. They can also be a great way to teach your children about the value of saving. There are many types of children's accounts available so you should assess exactly what you want from the account and then find the account with the right terms and conditions and rate of interest that suits you.

The age that a child can open an account themselves varies on the account provider but you could always set up an account on their behalf before they reach the required age. In most cases the child must be under the age of 16 to be eligible for a children's account. Be careful with children savings account because many banks will try to entice you with freebies but these banks might not be the ones that offer the best interest rates.

        


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