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 A
savings account is pretty much as the name suggests, they
are there to help customers save their money. They usually
have better rates of interest meaning more return on the
money that you save. There are however a number of different
types of savings accounts that customers can use to save
their money in and are available from banks and building
society's and now even supermarkets.
The
different types of savings accounts that people can set
up to save their money are:
Regular savings account
Instant access
accounts
Notice savings account
Children saving account
Online saving accounts
ISA - Individual Saving Accounts
The
great things with savings accounts is the fact that they
allow you to put money aside in a different place than you
usually have it such as in your current
account so your not as tempted to use or dip into this
money. You can deposit a lump sum into a savings account
or you can set it up as a standing order so you have regular
payments going into your savings accounts so you can build
up a nice sum without having to give it a second thought.
You
can have it so you put as much or as little as you can afford
into your savings account, but it is good to get into a
regular deposit if you are able to. If you have surplus
money each week or month, even if it is only a small amount
you can put this away and it will all build up. Imagine
if you put just £10 away each week, you would then
have £520 saved at the end of the year (and that is
without your interest added onto it). Just have a think
how much you spend at the pub at the weekend, or how much
the magazines you buy each week total upto. That small amount
when saved and added to a savings account really can mount
up and make a big difference. The figure of £10 a
week was just an example and you can add more or less depending
on your circumstances, but at £10 a week that is more
than enough to get a holiday booked or to pay for your car
insurance or just to keep on adding to and saving more on
top of it. If you were just to save that amount over 4 years
it would total well over £2000 and that is without
the interest you would have added on (and also the interest
you would have earned from the previous years).
It
is worth "shopping round" when looking for a savings
account to find one that suits your needs best.
If you are planning on just adding money as either a regular
deposit to the savings account or you want to add a lump
sum (the total per year being £3000 or less that you
are going to be adding to it) then you could well be best
to look at an ISA
which is a tax free savings account that allows you to deposit
a maximum of £3000 per year into the account and any
interest you earn is tax free so you get to keep all the
interest that you will earn!
It is worth checking out all the rules which should be made
clear to you when you are looking into any account, such
as if there is any penalty for taking money out of the account
so you know how exactly it all works.
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