Instant Access Savings Accounts: Instant Access savings accounts are most suitable for short-term savings like an emergency cash fund to be drawn on immediately in the event of, say, redundancy or a flooded bathroom.
It is prudent to have at least three to six months take-home pay attracting the best saving rate possible as a back-up fund in case you lose your job. There are now some excellent high interest savings accounts that allow instant access – an increasing number of these are now online accounts.
It is worth bearing in mind that the banks are free to change the interest rate they pay you at any time. While these changes are often related to changes in UK interest rates, sometimes banks just alter rates (normally downwards) for no apparent reason. It is important that you regularly check you are getting one of the best interest rates for your savings.
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Instant Access Savings Accounts Best BuysNotice Savings Accounts: Can be helpful if you find it too tempting to plunder an Instant Access savings account. In general though, the rates available from Notice Accounts are not significantly better than those available from the best instant access savings accounts, so it is hard to justify restricting your access to your cash.
The interest rates paid by Notice savings accounts often change over time, normally for the worse, and so it is well worth regularly checking to see if your account is still competitive. If you are no longer getting the best saving rate then change accounts.
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Notice and Fixed Rate savings account Best Buys.
Fixed Rate Savings Accounts: These are particularly useful if you are saving for a specific future event: a wedding, school fees, or a big holiday for example, and you need to know exactly how much your money will grow.
The downside to Fixed Rate Accounts is that you cannot access your savings without incurring a penalty. The penalties vary but normally involve forfeiting some or all of the interest paid to you over a given period. Keep monitoring how your savings account compares with the best savings rate being offered on the market.
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Notice and Fixed Rate savings account Best Buys.
Cash ISAs: The chance for genuinely tax-free saving make Individual Savings Accounts hard to beat. They can be used for short or medium-term saving depending on your needs.
The main drawback with Mini-Cash ISAs is that only £3000 may be saved tax-free each year - though there is no restriction on the amount that can additionally be saved in normal taxable savings accounts.
If you put money into a Mini-Cash ISA you are not allowed to invest in a stocks-and-shares Maxi-ISA in the same year, though you may invest in a stocks and shares Mini-ISA.
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Mini Cash ISA Best Buys.Regular Savings Accounts: Many banks and building societies now offer regular savings accounts which pay very high rates of interest but are restrict the amounts of money you can pay in. The top rates are normally also available for only 12 months and only if you make twelve payments. Click here to see our
Regular Savings account best buys.
Children’s Accounts: The children’s savings accounts available include instant access, notice and fixed-term accounts. Important things to watch out for include the rate of interest, any notice period, the minimum deposit, and how often the interest earned is calculated and credited.
You should also be aware of how easy it is for the child in question to access the money. If you wish to ensure that you retain control over the savings until you believe that the child in question is ready to look after them responsibly you should check the access arrangements carefully.
You will have to fill in Form R85 on the child’s behalf to ensure that no tax is deducted at source from the interest - banks and building societies will supply this form. Click here for our
Children’s Savings AccountsBest Buys.
