Savings Accounts
What is a savings account?
A savings account is a home for your money. It's usually differentiated from your current account. A current account tends to be where you do your day to day banking or spending, whereas a savings account is where you would put money for a rainy day, or emergencies.
Are there different types of savings accounts?
There are different types of savings accounts. The savings accounts can be different rates, for example, tiered, where you earn more interest the more money you save. And there can also be notice savings accounts, where you earn more interest the longer you keep your money there.
Do building societies offer more interest?
Building societies don't really offer more interest. This used to be the case, but since many building societies have converted to banks, or demutualized, this isn't the case anymore. Usually, the place to obtain more interest is Internet-based accounts.
How do I know I am getting the best savings account?
With savings accounts, to know you are getting the best deal on your savings account is to do research. You can either do this on the Internet, there are sites such as www.moneyfacts.co.uk, which have useful guides to all the top savings rates, or, if you don't want the DIY approach, use a financial professional, such as an independent financial advisor to do the donkey work for you.
How do I know I am getting the best deal?
When dealing with savings accounts, the way to ensure that you're getting the best deal is to constantly monitor our accounts. We have to be careful that institutions don't attract us here with a high rate and then drop it down when we're not looking. It's a constant monitoring of the best rate there is around is the way to achieve the best returns on our savings.
Can I access my savings online?
With savings accounts you can access your savings online with most online accounts. Not all institutions have online electronic banking and of course we always need to be aware of security issues. But most companies now offer online access to our accounts and usually, online accounts offer better value or higher interest rates than their non electronic counterparts.
How much can I put into my savings account?
For a savings account there isn't really a limit to how much you can save. However, some accounts do have ceilings, for example, Isis has a limited amount you can put in and save. However, for most savings accounts, it's as much as we can.
Will my savings be taxed?
Your savings will be taxed. Your interest will be taxed at the same rate that you pay tax. For example, if you're a basic rate taxpayer, you'll pay 20% tax on your savings. A higher rate taxpayer will pay 40% tax on their savings. But a non-taxpayer can apply to have no tax on their savings at all. This is done via an R85 form available from HMRC, the Inland Revenue.
What is an instant access account?
In saving, an instant access account is where you can immediately access your money. Bank common accounts, for example, are usually instant access.
What is a notice account?
In savings, a notice account is an account where there is normally a time period before you can take the money out. For example: thirty days, ninety days, and sixty days. With a notice account, you usually get a higher rate of interest for committing and saving your money for a longer time.
What happens if I want my money immediately from a notice account?
If you want your money immediately from a notice account, most notice accounts will allow you to take your money out immediately, just like an instant access account, but you will forfeit any interest you have gained over that time period.
What is a national savings account?
National savings accounts are accounts that are run and backed by the UK Treasury or the UK government, therefore, they are 100 percent secure. National savings offer a wide range of products from basic instant access and savings accounts through to savings certificates and premium bonds.
What is a regular savings account?
A regular savings account is an account that you put money into regularly, normally each month. The reason for this is the institution will give you a higher interest rate because you've committed to saving the money regularly for a set period of time, usually over a year.
What is a savings bonus?
A savings bonus is a loyalty bonus or a reward that the institutions give you for really sticking with it. For example, if you put your money in and keep it in there for a year, three years, or five years, a bonus gets added at these times. It's the institution's way of saying thank you for sticking with them.
