Now that the Christmas and New Year celebrations are over, it is time to look ahead to 2020, which for many consumers means sorting out their finances. One way to become more financially secure this year is to start a regular savings habit. For those new to saving, the many different types of accounts available can make it difficult to choose the right one for their needs.
To help new savers get started and reach their 2020 savings goals, we have looked at the different types of accounts, along with the highest rates available on an opening minimum deposit of just £1.
For those who want to start saving a little money each month, a regular savings account could be the ideal option. A regular savings account usually requires savers to deposit a minimum amount each month for a set period of time. The interest on regular savings accounts can seem higher than that being offered on other types of savings accounts, but this is due to interest being earned on a growing monthly balance and not the total balance at the end of the 12 months. To find out more about how interest is calculated on regular savings accounts, read our guide Why do regular savings accounts seem to pay the highest rates?.
The highest rate on a regular savings account for a £1 minimum opening deposit and with no opening restrictions comes from Coventry Building Society, which pays 2.50% gross on its Regular Saver. This account has a 12-month term, with interest being added on its anniversary. It does not require a minimum monthly deposit, but a maximum of £500 is permitted each month. Earlier access is permitted subject to 30 days’ loss of interest. This account can be opened online, in branch, by post or by phone and then managed online and by phone.
Those wanting to create an emergency savings fund to provide financial security for whatever life may throw at them should consider an easy access account. Unlike many other types of savings account, these accounts allow savers to access their money instantly but, as a result of this, they tend to offer lower rates compared to other types of saving options.
Ford Money currently offers the highest rate on an easy access account with a minimum deposit of £1, with its Flexible Saver paying 1.35% gross. This account pays interest on its anniversary and allows unlimited further additions and withdrawals. It can be opened online or by phone and then managed online only. There is also a version of this account that pays interest monthly at a slightly lower gross rate of 1.34%.
Whether saving for a holiday, wedding or even next Christmas, a notice savings account is a great option. Notice accounts often offer higher rates compared to easy access accounts and, although they allow unlimited further additions, withdrawals are only permitted subject to a predetermined notice period. This makes these accounts ideal for those who know when they will need to withdraw their money.
Moneybox offers the highest rate on a notice account with a minimum opening deposit of £1 with its 95 Day Notice Savings Account. This account pays 1.65% gross monthly and allows unlimited further additions. Withdrawals are permitted subject to 95 days’ notice. This account can only be opened and managed via its mobile app.
Those savings for a deposit for their first home can no longer open a Help to Buy ISA, but Lifetime ISAs (LISAs) are available as an alternative. These savings accounts come with more terms and conditions, particularly when withdrawing money, than other types of savings accounts, but they have the benefit of including a yearly 25% Government bonus. A maximum of £4,000 can be saved into a LISA each year. To find out more about LISAs, read our guide on Help to Buy ISA versus Lifetime ISA.
The top rate being offered in the LISA chart is from Moneybox, which pays 1.40% gross monthly. It has the standard LISA terms and conditions and can only be opened and managed via its mobile app.
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.