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Wednesday, 3 October 2023

Savings options

If you want to put some money away to buy something big in a few months, or if you just want to make sure that you're covered financially for anything unexpected, you should think about opening a savings account.

Choosing the right way to save

There are loads of different ways of saving your money to choose from. To find an account to suit you that will also get the most out of your money, you'll need to think about a number of things, like:

  • how old you need to be to open the account
  • how much money you need to open the account
  • the interest rate that you get on your money
  • how much money you can afford to put into a savings account
  • whether you can make regular payments or just when you have some spare cash
  • whether you'll miss out on any bonuses or interest if you withdraw cash from the account
  • how much you want to save and for how long before using it
  • whether you can withdraw cash instantly, or have to give notice before you can take any money from the account

Savings accounts on the high street

Most banks and building societies offer a range of savings accounts, including online accounts. To get the most out of your money, you'll have to think about how much you want to save and for how long before using the money.

It may be convenient to have a savings account with the same bank or building society as your current account. This way you can manage your everyday living expenses through your current account and quickly divert any extra cash into your savings.

But bear in mind that you may be able to find a better savings account elsewhere. Having money in two separate places may be less convenient, but internet and telephone banking make sending your money to and from different accounts really easy.

National Savings and Investments

National Savings and Investments (NS&I) are the range of savings accounts offered to savers by the government. They are one of the safest ways to save your money.

If you do want to open an account with National Savings and Investments, think about how long you want to invest for. Take a look at all the accounts that you can apply for and decide which is the best for you.

Individual Savings Accounts (ISAs)

If you're 16 or over and want to earn interest on your money without having any tax taken away, a cash ISA could be a good option.

You can pay money into an ISA as often as you want, as long as the total amount you pay in cash over the course of a year isn't above £5,340.

They're ideal if you're planning on going travelling in the next year or you're saving for a car and you know how much you're going to need by a certain date.

ISAs are available from banks and building societies as well as National Savings and Investments.

Junior ISAs

From 1 November 2011, a new long-term, tax-free savings account is being introduced for anyone under 18 who doesn’t have a Child Trust Fund account.

If you’re 16 or over you can open a cash or stocks and shares Junior ISA, or both.

If you’re under 16, and meet the qualifying conditions, a parent or other responsible adult can open a Junior ISA for you.

The yearly limit for payments into a Junior ISA is £3,600. The money you save in a Junior ISA can’t be taken out of the account until you are 18.

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