How to search through the rif raff and find the account that's perfect for the way you save.
There are so many savings accounts around that unless you're particularly financially savvy it can be difficult to know where to start. To help you sort the rif from the raf, we share our top tips for finding your perfect savings account....
Interest rates
Choosing a savings account that pays a decent rate of interest may sound obvious but its actually astounding how many of us are actually loosing money on our savings. Unless the rate of interest your account pays after tax (detailed as the 'net' amount) is greater than the Bank of England Base Rate you'll be loosing out. This is down to inflation; the rate at which the prices of goods and services increase. If your savings aren't growing at the same rate as inflation is rising your money won't be worth as much and you'll be able to buy less with your hard earned savings.
For this reason, it's important that you choose a savings account with a continually high interest rate. By checking the 'gross' interest paid on an account you will get a better idea of what your money will actually be earning after any introductory bonuses have expired.
Rate guarantees
With this in mind, its a good idea to go for a savings account that offers a rate guarantee, this is a promise from your financial provider that they will continue to beat the base rate for a certain amount of time. Rate guarantees not only ensure that your account will keep working hard for you but will also save you the hassle of continually shopping around for better rates. However, do mane sure that you put a note of the guarantee end date in your diary and start looking around for a more competitive account as and when.
Unlimited withdrawals
While the number of notice accounts have dwindled over the past few years many do still impose an interest penalty if you make a withdrawal, these can be up to a month's worth of interest and can really affect the profitability of your savings. Access to your money is important so unless you are 100% confident that you wont be needing to draw on your savings it really pays to go for a saving account that offers unlimited, penalty free access.
Rate consistency
Accounts with low opening amounts and no tiered interest rates mean that you get a good deal even if you haven't a huge amount saved up. By going for a one-rate for all account, you can be confident that you'll continue to earn a decent return no matter what your balance.
Easy access
Many financial providers offer their best interest rates online and if you're happy to bank exclusively on your computer this can be your key to the best returns on your savings possible. However, if you prefer the reassurance that banking over the phone or at a local branch can bring, look for an account that offers flexible access, after all its important that you can use your savings account in a way that your happy with.
So, by putting our top tips into practice whether you are looking for a Cash ISA, a regular saver or a more traditional savings account you should be able to find the perfect place to keep your money growing!
