Category archives: Savings

Which is the Best Savings Account for me?

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If you want to save money you may find it frustrating that the savings account rates are so poor. As interest rates are low it means that the savings accounts are really low and this can mean that you might get frustrated at the small amount of money that you are making and hope that you can find something better. There is a range of different accounts and it is good to know more about them so that you can decide whether you might be best choosing something different which could potentially give you a better return on your money. Having a simple instant access account is what most people do but alternatives might suit them better.

Fixed rate bond

A fixed rate bond will tie your savings up at a fixed rate for a certain amount of time. Usually they will be for a minimum of a year and up to five years. The interest rate will be fixed for all of that time. The bonds will tend to pay a bonus at the end of the term but if you withdraw any money then you will not get it and your interest will be significantly lower. This means that they are best for those people that know that they will not need their money for the length of the bond. Some bonds will need a lump sum to be paid in and others will need a regular monthly payment. It will very much depend on which bond you choose.

Premium bonds

Premium bonds are government bonds. Anyone can buy the £1 bonds, although you have to buy a minimum of 25 at a time. The bonds you buy are entered in a monthly draw and if you win you will be given a monetary prize. The prizes range from £25 to £1,000,000 but the overall return tends to be low, particularly if you do not have many bonds. Although all bonds have an equal chance of winning if you have the maximum of 50,000 bonds you will have a much better chance of winning than someone that has significantly less. They are a very safe place to put your money and they can be much better than buying lottery tickets as you can get your money back. However, compared to other ways of saving, most people will find that they are not so good.

Notice account

Some savings accounts require that you give a certain amount of days notice before you withdraw the money. These accounts tend to pay more interest than other savings accounts. They may limit the amount of withdrawals you can make as well. They can be useful for getting more interest but if you think that you will need to withdraw money out quickly then they may not be a good choice for you.


An ISA is a special savings account where your interest does not attract tax. It is something that used to be popular when all interest was taxed once a person was earning over the taxable threshold. However, rules have changed now and if you earn in the first tax threshold then you will be able to earn up to £1000 a year in interest without having to pay tax. This means that ISA’s are really only now nest for those people that are higher tax payers or have a lot of savings earning lots of interest each year.

This is just a selection of the possible options. What is best for you will depend on how much you have to save, whether you want to save a lump sum or in instalments and whether you think you will need to get to your money quickly. It can be a good idea to learn a lot about the different options so that you can pick the one that is most suitable for you. It is then worth comparing different banks and building societies that offer this account to see how they compare. You will probably be most interested in the return that you will be able to get but it is worth looking at other things as well, to see if there are bonuses and penalties as well as finding out what the lender is like. As interest rates are low, you may find that the difference between the rates for different accounts is not that big. However, just a little difference could make quite a big difference to what you get back, especially if you keep your money in the account for a long or you have a lot of money. It is well worth doing the research. It is also worth making sure that you keep checking the rates because unless you are tied in to a fixed term you might be best to change your money to a different account regularly so that you can get a better rate.