How To Start Saving

Have you always thought about saving money but not sure where’s best to put your money? There are so many different savings options to choose from, and it can be hard to know which one gets you the best deal.

In this article, we’ll be discussing the various savings accounts available so you can find out which one works for you. 

Why is saving a good idea?

Saving money is certainly worth the effort. Everyone has to start somewhere to help improve their overall situation and become financially stable. The more you save, the more options you have later down the line. 

Saving allows you peace of mind. If money is tight, it’s always good to know that you have savings to fall back on. As your savings pot starts to build, the less financial strain you’ll feel when those unexpected issues arise. 

Having money saved also provides you with a little more financial freedom. It puts you in control of your finances and helps reduce stress from always having the appropriate funds in your current account. In short, no one ever regrets having savings. 

Choosing a savings account

Deciding where to put your money may sound simple, but there are lots of factors to consider. This includes how much interest you’ll receive on your savings, as well as how long it takes to access your cash. The account you choose is also dependent on your specific savings goals. 

We’ve listed some of the main savings accounts below:

Easy-access savings: This type of account allows you to withdraw your savings at short notice and is similar to a regular current account. It’s flexible and ideal if you’re looking to save for a special purchase, such as a family holiday. However, interest rates tend to be low on easy access savings.

Easy-access ISAs: With this account, you can save £20,000 tax-free every year, without having to worry that your money is at risk. However, interest rates may be low and returns could be less than alternative ISA options.

Boosting interest that you earn

The following savings accounts all pay higher interest rates than the main easy-access accounts listed above. However, they provide less flexibility and have a few rules that you must follow:

Fixed-term savings account: Otherwise known as a fixed-rate bond, opening this account means you’ll need to lock away your savings for a set amount of time at an agreed interest rate. You won’t be able to withdraw any cash until the end of the term.

Fixed-rate ISAs: Again, this account is designed to lock away your money for a set period offering a highinterest rate in return. However, cash ISAs allow you to access your money should you need it. But, you may receive a heavy penalty for doing so.

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