If you've been good this Christmas and spent within your means, congratulations! Now is the perfect time to start some serious saving, or possible boost a nest egg you may already have.
When thinking about where to start, start by deciding on a target. Perhaps you want to maximise your Individual Savings Allowance (ISA), or lock away your funds for a set term. The best place to start is your ISA, because every penny you earn in interest is free from tax. You have until 1 April to use up your allowance, which is currently £3,000 but this is set to change to £3,600 for the next tax year.
The hardest part when it comes to saving is getting into the habit of saving regularly, which is ideally every month. By working out a budget, factoring in your essential spends each month, you can see how much you can afford to stash away – but being able to do so does take some serious will power. The best way to avoid spending your savings is to set up a standing order to take it out of your account the minute you're paid.
Once you have maximised your ISA allowance, your personal circumstances will decide the perfect savings account for you. There is a broad range of savings accounts out there, all tailored to your needs, such as regular savings accounts, fixed rate savings accounts , notice savings accounts and no notice savings accounts .
If you want to set aside a regular sum each and every month, you should choose a regular savings account. They allow you to save from £1 a month, but most will have a cap as to how much you can put in. If you find it difficult to stick to a regular sum each month, you should choose a notice savings account or no notice savings account .
If you have a lump sum to put away and can afford to lock it away, a fixed rate savings account will let you. Be aware you won't be able to make a withdrawal during the term without incurring a penalty, so you need to be sure you are happy to do so.
Whatever savings account you choose, with a good savings habit in place, you'll be able to sit back and watch your money grow. Always remember to check our Savings Accounts Best Buys to see how your account performs as the savings market is always changing – and don't ever be afraid to switch your account!
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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