There are many different factors that determine what savings account you choose. If you are saving for a house deposit or a new car, or maybe your retirement, your motivation will make a difference.
The amount you are starting with and how often you will need to access this money will also determine what account is the most suitable for you.
That’s why we have created this simple guide, so you can choose the best savings account for your needs...
How much are you looking to save?
The amount you’re looking to save will impact what savings account is right for you. If you're looking to deposit a set amount each month, a regular savings account would be suitable, as it requires a set monthly deposit.
If you fail to deposit the minimum monthly amount, you may be given a lower interest rate or the account could be closed. ISAs do come with an annual cap on the amount you can save - for example, 2020/2021 has the ISA cap of £20,000.
Will you need access to the money immediately?
Different savings accounts have separate rules regarding withdrawing your money. The more rules involved with your account can mean you will receive a higher interest rate on your savings.
If you are looking to access your account regularly, easy access accounts allow you to withdraw your money whenever you like without incurring a penalty. Compared to fixed-rate savings accounts, they have a lower interest rate; however, fixed accounts require you to save your money for a fixed period of time.
How much risk is there with a savings account?
Any savings accounts with popular banks and building societies are low risk. Your savings are also protected up to £85,000. If your savings are above this amount, it's helpful to spread it across different institutions.
This can offer low returns, therefore alternative investments such as stocks and shares are an option if you’re comfortable with the risk of capital fluctuating.
If you're not sure about what savings account is best for you or you would like to discuss your financial planning further, get in touch with a member of our team today who will be happy to talk you through any questions.