When it comes to choosing a savings account, certain types require you to first open a current account with the provider. This is the case for accounts like a regular saver, which gives you access to a savings account.
There are various types of savings accounts available, and the right one(s) for you will depend on factors such as the amount you want to save, the duration of your savings goal, and how easily you want to access your funds.
Instant-access accounts
An instant-access account, also known as an easy-access account, allows you to withdraw your money at any time without penalties. The funds will quickly appear in your designated bank account. These accounts generally offer lower interest rates compared to more restrictive options, but there are some high-interest deals available that offer around 5%.
Notice accounts
A notice account provides you with a certain level of access to your cash, but requires you to give a specified notice period before making a withdrawal. You can usually make unlimited withdrawals, but the notice period must be adhered to. Common notice periods range from 30 to 120 days, although some can be even longer. Notice accounts generally offer higher interest rates compared to instant-access accounts, with rates increasing as the notice period lengthens.
Fixed-rate accounts
Fixed-rate accounts offer higher interest rates if you are willing to lock your money away for a predetermined period. However, you will not be able to access your funds during the fixed term, unless you are willing to pay a penalty. This type of account is ideal for savers who have a lump sum to deposit and do not plan on adding more funds after the initial deposit.
Regular saver accounts
A regular saver account is a great option for individuals looking to develop a savings habit. These accounts require you to make a set amount of monthly deposits, typically ranging from £25 to £300. They often have a limited duration, usually one year. Some accounts allow withdrawals, while others do not, so be sure to check the account conditions before signing up. It’s important to consistently make monthly deposits to maintain the higher interest rate.
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