There are many savings accounts available, but with interest rates being so low, it can be hard to know which to choose to try to get a fairly decent return. You also need to consider how easily you want to get the money and the reputation of the financial institution you are savings with.
If you want to get to your savings easily, then you will need an instant access account. It is easiest to use one provided by your current account provider as they are easy to find, you don’t need ID to apply and you can transfer the money to your current account right away. However, there is a fairly high chance that they will not have the account which provides the best interest rate. It could be wise to compare different instant access accounts and calculate how much more interest you would receive each year if you were with an alternative company to decide whether you think it is worth going with a different one.
To get more money on your savings you will need to look at accounts which are not instant access. These come in a selection of different forms. There are the notice accounts where you will need to give a certain number of days’ notice to withdraw money and there are the fixed term accounts where you tie your money up for a certain time period, usually a year or a number of years. As the money is not accessible, it means that you need to only use money that you can afford to do without for that time period. You can usually still get to it if you have to but there will be a penalty to pay, which is usually in the form of not paying interest for a certain time period. This means that if you do have an emergency and need the money, you will be able to get to it, but it is best not to as you will end up paying a penalty for the privilege.
Once you have decided on the type of account that you need, then you will need to choose between them. Obviously the interest rate will be the key thing to look for, with the highest rate being the one that will give you the best return. There are comparison sites where you can see which have the highest rates and they can be really useful. However, they will not list every type of account and you may want to take a look at other places for yourself or other websites which look at a bigger spread of accounts. You could always consider using an independent financial advisor to help you, but you will have to pay them and it will only be worth it if you have a lot to save and so the amount that you pay them will be covered by the increase in interest you get due to their recommendation.
Some people will also look at other factors as well as the interest rate and it is worth considering this too. They might want to put their money in a financial institution that they have heard of and that they trust. They may worry that rates may quickly change so research them to see which ones tend to keep their new customer rates for a long time. They may want a local branch so that they can talk to staff face to face. So there are a few other things that you might want to think about as well as interest rate alone. It is worth spending a bit of time finding out more about what is available and thinking about which savings account will be the best to suit your needs with regards to all of the factors as well as just interest rate.
It is worth spending time doing some research though. It could make a big difference to your peace of mind as well as the return that you get form your savings. Although with interest rates low, there is not that much interest paid on any savings accounts at the moment, finding the highest rate can still make some difference, particularly if you have a lot of money to save.