Deciding why you’re saving will help you to choose the right account or mix of savings accounts.
If you’re saving for a specific goal like a new car or holiday, you may want to think about an account that gives you tools to help you supercharge your savings (the ability to set and regularly contribute to a savings goal for example) and easy access once you've reached your goal.
But if you can resist the temptation to spend your savings, it could be better to lock your money away for a fixed amount of time. Generally with a term deposit, the longer the term the higher the interest rate.
Here are 5 things to look out for.
1. Introductory bonus offer
These rewarding interest rates are offered when you first open a savings account. But they don’t last for ever – two to three months tends to be the norm.
2. Bonus interest
Bonus interest can really help increase your savings pot. Pay close attention to the qualifying criteria though, you may need to deposit a certain amount of money each month or keep your balance higher at the end of the month than the start, often without making any withdrawals.
3. Penalty-free withdrawals
If you know you’ll need to access your money quickly, then look for a savings account that doesn’t charge you a penalty or an early withdrawal fee.
4. Fees and charges
Most savings accounts don’t charge account-keeping fees but it’s likely your everyday transaction account does. When it comes to withdrawing your savings, you may need to link it to your day-to-day bank account which may have associated fees e.g. monthly account fee.
Don’t let this deter you though, linking your savings to another account means you can easily set up a recurring transfer so a portion of your salary, for example, goes into your savings account.
5. Support to help you save
Your financial wellbeing is important. Having savings set aside for a rainy day, to cover unexpected events or for the future, as well as fun things like holidays is crucial.
Before you open a savings account, check that you'll also have access to savings related guidance, tools like a savings calculator or budget planner and features that support you to keep on track as you save.
Regardless of the type of account you choose, the key to successful saving is to withdraw your money sparingly using your transaction account to make everyday purchases instead of dipping into your savings – here's more on that.