How To Choose A Savings Account

How To Choose A Savings Account

August 27, 2022 11:10 am Published by

Choosing A Savings Account

Now more than ever, people are looking to put savings away for a rainy day, whether it’s to account for a rise in bills or just a nest egg for an unexpected cost, more people are choosing to open savings accounts. Although people’s belts are tightening in spending, it doesn’t mean they don’t always mean they don’t have money to spend, sometimes they are just choosing to save that money instead of spending it. However, there are many different factors to take into account when it comes to choosing a savings account.

No matter what you might be saving for, whether it’s a house, car or just so you have a pot of money when you need it, it’s important to choose the best saving option for you. It’s important to remember what you are saving for, how much you’ll be saving and how often you’ll need to access the money will help to determine which is the best saving account option for you. Keep reading below to find out more about how you can choose the best savings account option for you.

How To Choose A Savings Account

How Much Are You Looking to Save? And What For?

When it comes to savings, it’s about choosing the best option that works for your money, saving for a house is very different to saving for Christmas. The amount you’re looking to save and what you’re saving for will impact the type of saving accounts you can have. If you’re looking to save for something like Christmas or just a rainy day, then a standard savings account will probably be best for you. Standard savings accounts allow you to deposit a set or flexible account each month and you can easily access or withdraw money when you need it as well.

However, it’s important to remember that the amount you deposit and save overall will affect the amount of interest you earn each month. Some people opt to save using an ISA, however these do have yearly cap amounts on the amount you can save in one, so it’s always best to check before choosing your option. When saving for things such as a house, there are specialist savings accounts and ISAs available and these are designed to help you make the most out of your money.

When Will You Need Access To The Money?

Another thing that will affect the type of savings account you choose will be when you need access to the money. If you need access to the money regularly or are looking to withdraw money at irregular intervals, then you’ll need a savings account with early access or an ISA might be the best option to go for, as long as you don’t exceed the cap each year. Should you be looking to save for a fixed period of time or a fixed amount each month, then a fixed rate savings account is probably a much better option, as you’ll earn a higher level of interest each month on the money you’re saving.

savings account

Is There A Risk To Saving?

Some people choose to invest excess money in other ways, as they can make much larger sums back when choosing the right investment, however these can also pose a risk and that’s why people do opt to save, especially when they have an end goal in sight. If you do choose to save money, then major banks and building societies will project your money upto £85,000. If you are looking to save more than £85,000, then you might need to consider spreading your money across multiple accounts to ensure it is all protected.

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