Working Your Savings Into Shape
It is vital you keep your money matters under control and as healthy as they can be.
Having some savings stashed away is always a sensible idea as no-one knows what the future will predict. Regardless of whether you haven't started saving yet or currently have some savings in place, taking the time to understand the best deal for your needs could pay dividends in the future.
There are various types of savings accounts, each with different features and benefits so invest a little time into finding the best account to place your pounds into.
If you want to be able to use your savings as and when required then an instant access account may be the best option for you. Many people choose to keep an 'emergency fund' in an instant savings account to enable the money to be accessed whenever it's needed. This is particularly useful if it's likely you might have unexpected costs to cover, such as repairs to your home or your car.
The reason that instant - or easy - access accounts are one of the most popular types of savings options is due to their flexibility. Similar to how you can withdraw your money as needed, you can also deposit money into this type of account as and when you have some to spare. It is important to understand that in the United Kingdom the rate of interest paid on instant access accounts tends to rise and fall in line with the Bank of England's base rate.
If you're prepared to sacrifice the flexibility that comes with instant access accounts and have money you can afford to stockpile for twelve months or more, then you can usually earn a higher rate of interest by opting for a fixed rate bond. This type of savings account offers a fixed amount of interest for a set period. You can usually only make one deposit when the account is initially opened; therefore, a fixed rate bond is perhaps not the best option if you don't have a lump sum to invest and want to add to your savings each month.
Similarly to fixed rate bonds, a regular savings account offers fixed term interest rates but with the added capability of adding to your savings account on a monthly basis. This means a lump sum is not required to open the account - and the minimum deposits are also quite low.
As there are various types of accounts available, it pays to take a little time to compare savings accounts and find out which one will make your money work hardest for you.
About the Author:
Andrew Regan writes for a digital marketing agency. This article has been commissioned by a client of said agency. This article is not designed to promote, but should be considered professional content.