Savings accounts essential guide

There’s a wide range of solutions to your savings requirements – and each is designed to meet the needs of the saver.

With so many around, it’s sometimes hard to see what each one provides and whether it’s the right account for you.

So whether you’d like to make the most of tax-free interest, want to be a regular saver or even get your children off to a good start, here’s our at-a-glance low-down on different savings accounts.

Cash ISA

A Cash ISA is simply a savings account where you don’t pay tax on your interest – which could mean an extra 20% on your nest egg.

Anyone over the age of 16 can put up to a maximum of £20,000 into a Cash ISA during the tax year which starts in April (allowance set for 2018/19).

Although your interest is tax-free the rate you get on ISAs might not always be the best on the market, and you may get better rates on regular savings accounts because the first £1,000 of interest is now tax-free in an ordinary taxable account.

Find out more about cash ISA accounts

Easy access / instant access savings

Instant access savings accounts allow you to withdraw your money quickly and easily. You can put money into these accounts when you please, and take money out whenever you choose. Some let you make withdrawals as often as you like, while others might limit that. So if you think you may need to withdraw some of your savings then an instant access savings account is ideal.

Find out more about instant access savings accounts

Limited access / notice savings accounts 

If you don’t need immediate access to your cash you can benefit from higher interest rates with a limited access account.

Instead of having instant access to your savings, with limited access accounts you agree to lock your money away for an agreed period of time – or have a set number of withdrawals a year and have to give up to 90 days’ notice. Because of these rules, this type of account often pays a higher rate of interest than the instant access.

If you do make an emergency withdrawal from a notice savings account, you’re likely to lose some interest.

Find out more about limited access savings accounts

Fixed rate savings accounts

If you can afford to lock your cash away for a set period of time then a fixed-rate savings account can offer you a better return on your money.

Fixed-rate accounts will often pay higher interest rates, increasing the longer the term. The interest rate is fixed at the time you open your account, so you have a guaranteed return. But you can’t usually access your cash during this time, and if you do the penalties can be high.

There’s also no guarantee that the difference between fixed-rates and general rates will continue: the general interest rates may fall below or rise above the fixed-rate.

Learn more about fixed rate savings accounts

Regular savings accounts 

These accounts are designed to help encourage you to save and keep on saving on a regular basis.

The amount you can save each month varies from £25 to £500 and withdrawals may be limited, but regular savings accounts may provide higher interest rates. And because your money will be building up gradually, your overall return might be more modest.

Learn more about regular savings accounts

Children’s savings accounts 

Get children into the habit of saving and help them understand the value of money and save from an early age. Parents, grandparents, guardians or friends can use them to save for the youngsters’ future. There’s often a bonus as deposits grow, and they can see their interest growing too.

Learn more about children’s savings accounts

Help to Buy: ISA

This is a cash ISA specifically for first-time buyers looking to build up a deposit for a house. Each holder can get up to £3,000 of free money in top-ups because the Government adds a 25 per cent bonus when you buy your first home.

Take a look at our range of ISA accounts

Flexible ISA 

The Government has introduced a flexible ISA which allows you to move money in and out of an ISA without counting against your tax-free allowance. If you replace anything withdrawn within the same tax year, your total ISA allowance for the year is unaffected.

Take a look at our range of ISA accounts

Online accounts 

Manage your savings from your home or on the move. Online accounts provide you with quick and easy access to your account.

Get on top of your savings

Last updated on:

Sign up to our newsletter

We regularly send out newsletters with product information, advice on improving your finances and top tips. If you would like to receive this please sign up to our newsletter, which you can unsubscribe from at any point.