If you want to achieve your financial goals – be it buying a home, a car or funding some travelling – it’s important to try and grow your savings. One of the safest ways to try and achieve this is by opening a savings account. However, the array of products on offer can be overwhelming. Below, we explore the different types of savings accounts available.
Easy access accounts allow you to withdraw your money at any point without any hassle. They can even come with a card to allow you to take money out of cash machines. However, this may be accompanied by low-interest rates or a set number of times you can withdraw money. Nevertheless, they make sense if you feel like you might need to draw upon your savings at short notice.
A regular saver account requires customers to deposit money into their savings account each month. There will usually be a set limit to the money you can deposit each month though. This is ideal for customers who only have a small amount of disposable income to set aside each month.
Fixed-rate bonds are an excellent choice if you have savings that you know you won’t need to access for a set amount of time. This product tends to offer the highest interest rates as compensation for you losing access to your money. If you’re able to give up your cash for the set period, this makes a lot of sense.
Cash ISAs generate interest tax-free. This is particularly useful if you’ve exceeded your personal savings allowance for the year. There’s a limit set at £20,000 for the 2022-23 tax year for the amount you can put in your cash ISA, but they make a lot of sense if you’ve gone over your personal savings allowance.
High-yield savings account
To access the highest interest rates, you’ll be met with conditions that lock away your money for a set amount of time. However, if you have long-term financial goals and need to grow your savings, opening a high-yield savings account can make sense.
If you’re a low-paid worker, you could be eligible for a tax-free account. Workers who are on universal credit are able to open a tax-free account where you can save a maximum of £50 a month and receive a 50 per cent tax-free bonus after two years, worth up to £600.
As you look toward your future goals in life, you’ll realise that you need to grow your savings. But by looking through the guide above, you should be ready to select the best product for you and your family.