Savings: the basics
Sunday 18 April 2004
Whether it's one pound of your pocket money or your monthly wages, there are savings accounts and schemes out there to suit everyone.
Choosing the right type of account or scheme depends on what your spending habits are like, what kind of lifestyle you lead and of course, how quickly you want your money to grow.
Lifestyle choice
The right type of account for you depends on what kind of lifestyle you lead and your spending habits. For example, would you prefer to talk about your savings with someone face to face in a bank or building society? Or would you prefer to manage your money over the phone, by post or over the internet?
When deciding what's best for you, it might be worth considering the following:
- Do I have to pay a monthly fee?
- Can I withdraw cash as many times as I like or is there a limit?
- What is the interest rate?
- Is the interest rate fixed or will it change with the Bank of England's base rate?
- Is there a minimum amount I have to deposit when I open the savings scheme?
- Are my savings invested in the stock market?
- Is there any risk that I could actually lose some or all my savings?
Other ways of saving
As well as standard savings accounts, you might wish to apply for an Individual Savings Account, otherwise known as an ISA. Unlike normal savings accounts, ISAs are tax free, meaning that you get to keep all of your money.
Then again, if you're willing to put up with low rates of interest but have the chance to win between £50 and £1 million each month, then National Savings' Premium Bonds might be for you. Originally created by the Government in 1861 to give the public a safe and easy way of saving, National Savings products are available to anyone over the age of 16 and can be applied for via post, or in a Post Office.
Get more info
If you're unsure about what type of savings scheme best suits you, talk to your bank or building society. You could also read the money and financial sections of the Sunday newspapers, which usually publish lists of all the different savings accounts and schemes available, along with their interest rates.
