What is the Best Savings Account?

best savings account - person putting in a coin in a piggy bank

You might have come to a point in your life where you want to save for the future. If this is the case, you’re probably thinking about opening a savings account. However, it’s not as simple as you think. If you haven’t opened one yet, here are a variety of savings accounts to help you choose the best one for you.

Instant Access ISA

If you need access to your money, an instant access ISA is the one for you. This account is tax-free and will allow you to withdraw how much money you want. You’re also able to put in as little or as much as you want. Whenever you open an instant access account, there will usually be a deposit of £1 before you can begin to use it.

An instant access ISA is the best one for you if you want to:

  • Withdraw money whenever you want
  • Avoid any risks with your money
  • Save leisurely
  • Earn a better return when compared to using your current account

Fixed-Rate ISA

This type of savings account allows you to store your money for a specific time period and will include an interest rate. This interest rate depends on the length of your term, which can range from 1-5 years. The longer the term, however, the more interest earned.

A fixed-rate ISA is the best one for you if you want to:

  • Have an interest rate that is higher than other savings accounts
  • Avoid getting charged on the interest you earn
  • Open a free account

Regular Savings Account

If you open a regular savings account, you’ll have to pay a certain amount to your account each month. You’ll then usually be given a higher interest rate by your bank or building society in return, which is higher than what you’ll get with a current or ordinary savings account.

A regular savings account is the best one for you if you want to:

  • Save regularly
  • Save for a special occasion or event, such as a holiday
  • Avoid investing in a lump sum
  • Earn more interest

An Investment Savings Account

This savings account is also known as a stocks and shares ISA. If you want to put your money into different investments, this is the account for you. These are investments such as individual shares, investment funds, investment trusts or bonds and gilts. Unlike other savings accounts, there’s a chance of putting your money at risk, so only open an investment savings account if you’re prepared to take this risk.

An investment savings account is the best one for you if you want to:

  • Have flexibility
  • Keep more of your returns
  • Have tax-free income when you retire
  • Have 100% tax-free Capital Gains

Innovative Finance ISA

An innovative finance ISA enables you to use your tax-free ISA allowance to invest in peer-to-peer (P2P) lending. This is a form of investment where money is lent to borrowers and businesses. The borrowers then pay you back the amount borrowed, which includes interest. This interest is the return you get and is also tax-free.

An innovative finance ISA is the best one for you if you want to:

  • Earn a tax-free return
  • Support businesses and entrepreneurs
  • Get a better interest rate

Children’s Savings Account

If you want to save for your children’s future, opening a children’s savings account is the best way forward. As well as saving for your child’s future, it also gives them a place where they can start saving when they’re old enough.

A children’s savings account is the best one for you if you want to:

  • Help your child/children save for the future
  • Have an interest rate that is higher than adult ISAs
  • Have tax-free savings in the long run

Which one is the best one?

To help determine the best savings account, you should think about your needs and choose the one that suits your goals for the future. There are many to choose from, so if you’re ever overwhelmed or unsure, make sure you visit your bank or building society for any advice or queries.

 

These are some of the savings accounts you can consider opening, which hopefully helps you narrow down your options. For advice, help, or for any enquiries, feel free to get in touch with our financial advisors from our directory here.

If you need help with your finances, our article on the 4 Ways to Improve Your Finances might be helpful.

If you have a business you want to advertise with CommunityAd, contact us here today!

News Categories

Trades

Business Directory Search