Bank & building society accounts
The first step towards a safer financial future
The usual place for squirreling away some cash for emergencies, or to fund future activities, is with high street or online banks and building societies. There's plenty of choice, and unlike other investment decisions, these are generally low risk saving channels.
Warning: Doing nothing could seriously affect your wealth
By doing nothing with your spare money, inflation will gradually erode the value of it. All the time your money is earning no interest, the cost of goods rise. But with the value of your money remaining the same, you will be able to buy less. Savings earning interest can help to offset the effect of inflation.
Questions worth asking yourself before making any savings decision include:
- What interest rates are offered to accounts in credit?
- Are there any account charges, and for what?
- Can you manage the account online?
- Is there a minimum opening balance?
- What introductory offers are there?
- Do they offer preferential rates on other financial products to account holders?
But when it comes to saving, choice prevails. Each account type has plus points and pitfalls, depending on the amount you are saving and how quickly you need access to your cash:
Instant access savings accounts
Gives immediate access to your money.
Interest paid tends to be low.
Enables you to withdraw your money provided the required notice is given, which can range from 30 days to four months.
Although flexible, in that they'll usually let you withdraw your money instantly, penalties are usually charged. You also usually need a significant sum in order to open one.
Regular saver accounts
Disciplines you to save a certain amount of money every month, usually from £10 upwards.
Money is saved for a specific period of time, ranging from one to five years.
During the term, withdrawals are restricted.
If you are serious about building up a cash reserve, some good advice now could be worth more in the long-term. Contact us today to discover if your savings vehicle is looking after your best interests.
* Compound interest explained