Who can open a savings account?
Most savings accounts are designed for adults, but there is also a selection of accounts for children under 16. Here is more information on how you can save for your child.
You might find that some savings accounts need a minimum opening deposit, which can be between £50 and £1,000, but some accounts can be opened with as little as £1.
If the savings account is not an ISA, you can usually open it with at least one other person, or add them to your account at a later date.
To open any savings account, you have to be:
18 or over (16 for cash ISAs)
A UK resident
Saving in a current account
You can save in a current account, but only consider a current account for savings if you find one that pays more interest than savings accounts offer, and you can remain disciplined not to take your money out.
Here are a few reasons why you should not save your money in a current account:
Lower interest rates compared to savings accounts, and some pay no interest at all. There may also be restrictions on how much of your balance you can earn interest on.
You could spend your savings easily: when your money is readily available, you may be tempted to dip in every now and again, which will eat away at your savings.
Monthly fees are common with high interest paying current accounts.
More vulnerable to fraud: you could lose your money through debit card fraud.
Topping up your pension
By saving into your pension pot you can access significant tax breaks, but you won't be able to spend the money until you are at least 55.
Saving for retirement is hugely important, so if you do have some money spare it can be worthwhile. Growth in a pension pot is largely tax free, but you can learn more about the details of private pensions here.
Investment ISAs
An investment ISA, also known as a stocks and shares ISA, is a type of tax-efficient investment account. You can earn a return by investing your money through shares, funds, investment trusts and bonds.
The annual ISA allowance means that any returns you earn are tax free. You won't have to pay dividend, capital gains or income tax on the profits you make from the investments held in your stocks and shares ISA.
You can find out more about investment ISAs here.