Choosing a savings account
If you've got some money to put away there are plenty of banks, building societies and providers eager to take your deposit.
Anybody particularly concerned about the security of their savings is advised to spread their money around different banks - up to £50,000 per bank account. As from October 2008, this is the level up to which the government will guarantee the safety of your savings in the event of a bank collapsing.
If you have over £50,000 in savings accounts, you may consider opening several bank accounts with separately licensed institutions in order to have a higher level of savings guarantee. Check our Deposit Guarantee Scheme page to check which banks have their own banking license.
Always make sure that you understand what risk, if any, your savings will be exposed to. You should decide in advance what you are saving for and how long you want to put the money away.
You might want to build up a nest egg by saving small amounts regularly. Some saving products pay a bonus if you don't make any withdrawals from the account. If you do need to make a withdrawal, you could find the interest rate on the account is reduced.
Many providers specify a minimum amount you have to keep in the account for it to remain live. Read the full terms and conditions and if you don't understand anything, ask for more information.
The best way to compare the ever-changing deals on offer is to use a daily-updated comparison table like the one below or check the featured listings at the bottom of this page. Click on APPLY to find out more information - there's no obligation.
Savings Accounts Best-Buy Table (updated daily)
| Bank | Account Name | Interest Payable | Gross Rate | AER | |
|---|---|---|---|---|---|
| ICICI | HiSAVE Fixed Rate (2 year) | Annually | 4.1% | 4.1% | Apply |
| ICICI | HiSAVE Fixed Rate (1 year) | Annually | 3.9% | 3.9% | Apply |
| Capital One | High Yield Bonds | Annually | 2.9% | 2.9% | Apply |
| Alliance & Leicester | Online Saver Issue 4 | Monthly | 2.5% | 2.5% | Apply |
| Abbey | Instant Access Saver | Annually | 2.5% | 2.5% | Apply |
| ICICI | HiSAVE Account | Monthly | 2.45% | 2.45% | Apply |
| Capital One | Flexi Saver (New Customers Only) | Annually | 2.35% | 2.35% | Apply |
| Birmingham Midshires | e-Saver Account | Monthly | 1.83% | 1.84% | Apply |
| Post Office / Bank of Ireland | Instant Saver | Annually | 1.1% | 1.1% | Apply |
| HSBC | Online Bonus Saver | Annually | 0.75% | 0.75% | Apply |
| Capital One | Base Beater Account | Annually | 0.55% | 0.55% | Apply |
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Investing a Lump Sum
If you have a lump sum you wish to save, shop around to find the best home for your money. The savings market is a competitive area and offers do vary.
Some accounts are fixed term. This allows you to deposit a sum of money for a fixed period of time at an agreed level of interest. But if you need access to the money before the term expires there will usually be a reduction in the level of interest as a penalty.
The interest rates on most regular savings accounts will vary depending on the levels set by the Bank of England every three months. A simple deposit account will have minimal risk because it is not tied to any stocks and shares.
It pays to shop around to find the best home for your money. Before you surrender your hard-earned cash to one of many hungry banks and building societies, do compare the available offers.
