How to choose the right savings account for you

Saving money successfully is a fantastic thing to get into the habit of doing, offering both long term and short term benefits. It is important that you make it a goal to put some money away each month so that your financial situation is as stable and secure as possible. Knowing where to put your savings and finding the right savings account can be tricky which is why we have accumulated some of the very best ways to ensure that you are always able to find the ideal savings account for your needs.

Knowing where to place your earnings should be straightforward but due to the wealth of options in which to do so out there, this can sometimes cause confusion and problems. There is often so much more than interest rates to think about and you will need to thoroughly evaluate the way that each savings account works so that your personal financial circumstances match up with the perfect account. Here are the main things that you should be looking out for:

Interest rates

Something to keep an eye on and compare is what interest rates are on offer. Some banks will offer higher interest rates initially which will then drop later on, others will do the opposite- as long as you are fully aware and up to date with how your contract will work then you can go ahead with your savings plan and make it a success.

Notice period

Another thing to keep an eye on is what the notice period is before you are able to withdraw funds. This can be anywhere from 30 days to a years, so make sure that you are comfortable with what is on offer before choosing to save your money in that location.

Time

Some savings accounts will require you to leave money in your account for a certain period of time before you are able to have access to interest payments and higher interest rates. Find out where you stand with this early on so that you are able to stay ahead and plan you time accordingly.

How is interest paid?

Establishing how you will be paid interest on what you deposit into your account is crucial. Different accounts offer various ways of paying you- some monthly, some annually etc. Make sure you are able to establish your arrangement in a way that best benefits you.

What about minimum deposits?

Before you choose your savings account make sure that you check whether or not you will need to make a particular minimum deposit before being able to continue saving. Some banks also prefer that you make a certain number of deposits in a certain time period, which is something to be aware of before making your final decision.

And taxes

The government here in the UK seeks to encourage people to save money by offering certain incentives for us to do so more effectively. An example of this is through offering no tax as is evident in the Individual Savings Accounts or ISAs. Make sure that you always make the most of these incentives as you will not only be able to save money but also do so without having to pay tax too!

While generally it is most people’s goal to be able to save enough to ensure that they have enough money to cover them in the event of an emergency, this is not always a viable option. If you ever find yourself not knowing where to turn when it comes to managing your cash flow problems, perhaps considering a short term loan may be an ideal solution in the short term. Make sure that whatever decision you make with regards to your finances is one that suits you and your particular needs best.

Generic advice is not a service regulated by the Financial Conduct Authority.