Conditions for savers have steadily worsened as
the Bank of England slashed interest rates in an attempt to slow down the country's plunge into
recession. To get the best rates for your savings, it is vital you keep an eye on how much interest your
money is earning.
All too often, rate conscious savers move their cash into an account with a seemingly attractive high interest rate, only to see the return plummet shortly after opening the account.
Choosing the right savings account can make a big difference when it comes to boosting your balance. Ensure your money is deposited in one of the best savings accounts. Use the compare facility to locate the best rates for savings by comparing easy access, fixed rate and ISA accounts from UK banks and building societies.
There are lots of options for those who want to put a bit of money away for a rainy day.
The main distinction when it comes to savings accounts is between those that require notice to take money out and those that allow withdrawals immediately. Notice accounts tend to impose a penalty for immediate withdrawal of any funds, usually in the form of a loss of interest.
Savings accounts offer either a fixed or a variable rate of interest. Many also include introductory bonuses in the form of an initial interest rate deal. Make sure you account for this when choosing between accounts. Find out how long it will last and what the interest rate will revert to after the deal period.
Nowadays, you can access most savings accounts in a range of ways. Many offer a card for cash machine withdrawals. You may also be able to visit a branch or manage your money online, over the phone or by post. It's up to you to choose the type of access you feel most comfortable with, however online accounts often offer more competitive rates.
When choosing a savings account you need to think about what you are saving for.
Easy access accounts are the most popular because, as their name suggests, you can access your money at any time.
However, there are a few things to watch out for when comparing easy access accounts. Some include introductory bonuses, which means the rate will drop after a certain period of time, often six or twelve months. This doesn't mean such accounts should be avoided, but you should be aware that you may need to move your money again if the rate becomes uncompetitive once the bonus period has expired.
You should also look out for withdrawal restrictions. Despite being labelled as 'easy access' some accounts penalise you for making a withdrawal.
If you can afford to lock your money away, you could earn an even higher rate. Fixed rate bonds pay a set amount of interest for a certain period of time and you cannot usually access your money during the deal period. They are therefore only suitable for savings you can afford to lock away. They also allow only one lump-sum deposit, so you cannot add to your savings during the term.
For those preferring to save on a monthly basis, a regular savings account with could be a better option. As with fixed-rate bonds, the rate of interest is fixed for a set period and you can't access your savings during that time, but rather than paying in a lump sum at the beginning you deposit money on a monthly basis.
Plenty of banks and building societies offer accounts tailored specifically for children. They may include some kind of free gift, but shop around for the best rate and account terms rather than a good freebie!
This type of savings account offers an income tax and capital gains tax-free home for up to £20,000 per year (in the 2017 to 2018 tax year). Savers choose to use their ISA allowance in a cash ISA, a stocks and shares ISA, an innovative finance ISA, a lifetime ISA or any combination of the four as long as you don't exceed the annual allowance.
The value of investments can fall as well as rise. You may not get back what you invest.