When it comes to choosing where you put your hard-earned money, there are several accounts to choose from. Whether you’re with a bank or building society, you may find yourself spoilt for choice with the range of options available.
How does a savings account work?
Unlike a standard current account, which allows you to make regular transactions, like paying for bills or day-to-day spending using a debit card, a savings account is designed to help you save money towards larger financial goals, like a holiday abroad, a new car or a mortgage deposit.
When you choose to save money with a bank or building society, depending on the account you choose, you’ll normally receive interest; money you receive on top of your savings while it’s held in the account, so you should see your money grow over a period of time.
What are some of the options available?
There are a range of options to choose from, depending on your financial circumstances and needs.
A fixed rate account may be suitable if you have a lump sum of money to invest that you don’t need access to in the immediate future. Fixed rate accounts usually mean your money is invested for a period of 1 to 5 years. They will usually offer a higher rate of interest compared to a variable rate account, so you can sit back and watch your savings grow.
If you need access to your savings, an easy access account could provide more flexibility around depositing and withdrawing money. Unlike a fixed rate account, you’ll be able to withdraw your savings at any time, but you may receive a lower, variable rate of interest, which means the interest rate could increase or decrease at any time.
A notice savings account could be suitable if you don’t require immediate access to your money but wish to receive a higher rate of interest than an easy access account. As the name suggests, a notice account requires you to give notice in advance of making a withdrawal. The duration of the notice can typically range between 30 – 120 days, depending on the account and the provider. There may be penalties to pay if you do not give the notice required.
ISAs (Individual Savings Accounts) allow you to invest each tax year up to the annual ISA allowance without paying tax on the interest you receive. The allowance is reviewed annually by the Government and is currently £20,000 for the 2021/2022 tax year. There are four types of ISA; Cash ISAs, Stocks and Shares ISAs, Innovative Finance ISAs and Lifetime ISAs and your annual allowance can be split across them (as long as the £4,000 Lifetime ISA limit isn’t breached).
Any savings account you open will have terms and conditions relevant to the type of account and the provider, so it’s important to read and make sure you understand them before you commit to opening an account.
How can the Marsden help?
We understand the importance of saving. In fact, we’ve been helping our members with their saving goals since 1860! Our friendly branch teams are always on hand to discuss your options and help you find the account that’s right for you.
Our savings accounts can be opened remotely, or through one of our eight branches by appointment only. You can view our full range of savings accounts on our ‘Savings’ page, or if you’d like to arrange an appointment with your local branch, you can find their details on our ‘Find a branch’ page.