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Top savings accounts to meet your goals

Top savings accounts to meet your goals

Category: Savings

Updated: 04/09/2015
First Published: 04/09/2015

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

We all know the importance of saving. Whether it's saving for a rainy day, for life's emergencies, for a once-in-a-lifetime holiday or that all-important house deposit, everyone should get into the habit of regularly putting aside money to build up a healthy sum.

Ideally, you'll have a clear goal in mind. This will mean you're far more likely to stick to your savings regime and will ensure that you're not tempted to dip into your pot for unnecessary expenditure, but the key to reaching that goal is to have the right savings account to suit.

So, with that in mind, we've compiled a list of the top savings accounts to help you meet your goals and fulfil all your savings ambitions.

  • The emergency fund. Everyone should have an emergency fund of some kind. In fact, it's recommended to have at least three months' of income squirreled away, as this should be a sufficient buffer should you find yourself in financial difficulty if, for example, you lost your job. It can cover other emergencies too, such as a boiler breaking down or the car needing to be repaired. Because these emergencies will be unplanned by their very nature, there's only one kind of account you should consider for an emergency fund – an easy access version. Make sure you opt for a restriction-free account that lets you make additions and withdrawals at any time (this may require a bit of extra searching as an increasing number impose restrictions these days), as that way you can not only add to the account when necessary, but can access your cash as soon as an emergency arises.
  • The rainy day fund. A rainy day fund could be a great addition to your savings portfolio. Here, you're not saving for something specific, and nor should it be seen as an emergency fund, but if you've got sufficient savings stashed away elsewhere, there's nothing to stop you from saving for rainy day treats. You've got a few options when it comes to this kind of fund – you could opt for an easy access account should you wish, but if you don't want to be tempted to withdraw your cash too frivolously, you may want a notice account instead. This way, you can be sure you really want to make that purchase, so you're not wasting your hard-earned cash unnecessarily. Or, what about a high interest current account? These accounts offer fantastic rates of interest (up to 5% in some cases) but typically only up to a set balance, typically around £2,000, which means they could be perfect for stashing away smaller savings amounts for a rainy day.
  • The new car/holiday fund. Here's where having a set goal can really come into its own. If you're saving up for a big purchase, you want to make absolutely certain that you don't dip into your pot before it's time to splurge, so not only should you remind yourself of why you're saving – ideally, give your account a name that will be a regular reminder, such as "My new car fund" – but you'll probably want to opt for a fixed rate account as well. This kind of account normally won't let you access your funds early (some do, but you'll probably have to pay an interest penalty), and if you've got an idea of how much you'll need and how much you can invest, you can choose a term accordingly. Alternatively, if you don't have a lump sum and instead want to save up over a year or so, consider a regular savings account.
  • The summer holiday fund. The summer holidays have only just ended, but if you've already got the back-to-work blues, why not start planning next year's getaway? If you start saving now you could have a nice little holiday fund by the time next summer comes around, and again, a regular savings account could be ideal. These accounts usually require you to save a minimum amount each month if you want to receive the headline rate – in some cases, you can get as much as 6% if you're loyal to a particular bank – so you won't be tempted to miss a month. It can be a great way to get into the habit of saving regularly, and some accounts allow you to withdraw funds at will rather than locking you into a 12-month bond, which is ideal for those who will be planning an early summer getaway.
  • The deposit fund. This is another clear contender for a fixed rate bond, as saving up for a house deposit will require the best rate necessary – and a lack of flexibility that'll help you stick to your guns. Chances are you'll be looking for an account that offers a longer term than if you were saving for smaller purchases, and you'll probably want to opt for one that doesn't have an early access facility. However, it'll be worth looking for those that let you make further additions, as you may not have a significant lump sum to put in just yet. Again, make sure to remind yourself regularly about why you're saving, as that will ensure you stay motivated and aren't tempted to break your savings habit.
  • Don't forget about ISAs! To really make the most of your savings, you'll want to make them as tax-efficient as possible – and that's where cash ISAs come in. From easy access ISAs to notice accounts and fixed rate versions, you'll be able to find a deal that can match any savings goal necessary, and as long as you choose wisely (you're only allowed one ISA per tax year, after all), you could have the perfect account for your needs.

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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