Choosing a savings account is not as simple as picking the one with the highest interest rate. Here is how you can get the best account to match your savings needs.
Investment ISAs put your capital at risk, and you may get back less than you originally invested.
Pay off your debt as soon as you can instead of saving up to make a large repayment.
This is because your debt will be charging you far more in daily interest compared to what you could earn in a savings account.
If you are a basic rate taxpayer you can earn at least £1,000 in savings interest before you pay any tax. This figure drops to £500 for higher rate taxpayers.
You can also save on tax by making the most of your ISA allowance. Like normal savings accounts, an ISA can come in various forms, such as:
You should choose an account that will not penalise or stop you if you need to withdraw your money on short notice.
If you can give notice before you need to withdraw, such as 60 days, then you could get a higher interest rate by saving in a notice savings account.
You can look at accounts that offer higher rates for tying your money up for a set term from a few months up to five or six years.
These accounts usually offer a higher interest rate compared to savings accounts that let you withdraw.
This guide explains how a fixed term bonds can help you grow your money over the long term.
A regular savings account could give you a good interest rate but you have to pay in a set amount each month.
These accounts do not usually let you make withdrawals and do not let you pay in large amounts of money at one time. If you forget to pay in one month you could also see your interest rate fall as a result.
There are savings accounts designed to help you grow your money on behalf of your child, tax free.
There are even children's savings accounts that you can save into until your child's 18th birthday.
The longer you have until you retire the more you will be able to save, but whether you plan to retire next month or in 40 years there is still a savings account suitable for you.
You should make the most of a pension, whether you have one already or need to start paying into one.
If you increase the amount you pay into your pension each month then the income you receive when you retire will be increased. Read our guide on how pensions plans work.
If you have retired, look for accounts that pay you interest on a monthly basis if you want to increase your income each month.
There are several savings accounts designed to help you save towards a deposit on a mortgage.
You can save into a government-backed savings account called the Lifetime ISA, which pays a bonus of up to £1000 every year.
Make sure that you find an account that pays you a good interest rate but also gives you the access to your money in case of emergencies.
You should choose a flexible savings account that lets you pay in and withdraw without giving any notice.
You can have a savings account in both of your names, which could be the first joint account you hold before getting married.
All content on money.co.uk is meant to be used as guidance and is not financial advice. For specific advice for your individual circumstances, it's better to seek the services of an Independent Financial Advisor.