Savings Explained
Whether you are saving for a rainy day, for a holiday or for a big-ticket item such
as a car, it makes sense to seek out the best possible interest rate. Making your
money work as hard as possible for you will enable you to reach your goal sooner
and will also prevent inflation devaluing your savings.
What types of savings account are there
The savings account you opt for will depend on a number of factors including the
amount you want to save, how frequently you will be putting money away and what
access you will need to it
The savings account you opt for will depend on a number of factors including the
amount you want to save, how frequently you will be putting money away and what
access you will need to it.
Easy
Access Accounts
The most popular type of savings vehicle is an
easy access account
(also often called a no notice account and an instant access account).
As their name suggests these products give you immediate access to your cash, making
them ideal for your rainy day savings pot which you may need to dip in and out of.
Millions of savers have an easy access account with the same bank or building society
they have their current account with. These products are easily sold as they offer
a higher rate of interest than the rate you are probably getting on your current
account and are therefore ideal if you have money to spare each month. While all
of this is true, the rates on easy access accounts vary hugely so it is well worth
shopping around to ensure you are getting a good deal.
The rates on easy access accounts vary hugely so it is well worth shopping around
to ensure you are getting a good deal.
Rates tend to be variable so they tend to go up at times of rising interest rates
and down when Bank rate, the country’s official interest rate, is cut. However,
your savings rate will not necessarily move in line with Bank rate so it is important
to keep an eye it and be prepared to move your money elsewhere if the rate becomes
uncompetitive.
