Savings Account

Savings accounts are designed to help you save by paying interest on the amount held in your saving account. The interest rates offered on savings accounts tend to be higher than those available on transaction accounts, and even higher rates are available when for larger sums and if you are willing to commit to leaving your savings and make no withdrawals.

The type of savings account that is going to earn you the highest interest will depend on a number of factors that include: Are you saving for a short term or long-term goal? Do you plan on making regular monthly deposits to your savings? Would you consider a package that includes a saving account and your transactional account?

Select the Best will help you answer these questions in pursuit of the best savings account for your needs and our comparison tools and tables will empower you compare rates features and conditions of the best savings accounts.

Selecting the best savings account

The first step in selecting the best saving account is to understand the types of savings accounts available with a view to then identifying the type of saving account which will best meet your needs.

Saving Account Types

  1. Online saving accounts

Online savings accounts generally offer savings interest rates at the higher end of the range though come with tight rules on how accessing your savings. It’s common for online savings accounts to offer no branch withdrawals, no cheque facilities and direct customers to either their internet or phone banking services. In most cases online savings accounts must be linked to a transaction account, the conditions associated with this linking vary by provider so it’s important to check id the on line savings account is Ok to link to your choice of transaction account.

Online savings accounts all feature variable interest rates which means they may rise or fall at the discretion of the account provider. The majority of on line savings accounts feature introductory offers of special bonus interest rates that are designed to entice new customers to apply. These bonus interest rates generally last for a few months after which point the interest rate reverts back to the saving accounts standard variable rate

 

  1. Bonus saver accounts

A bonus saver account is designed to reward customers, who save on a regular basis, with a higher bonus interest rate. To attain the bonus interest rate savers are generally expected to meet some requirements, a couple of approaches used by the banks on these accounts are:

  • Each month make a deposit into their Bonus Rate Saver Account above the minimum amount required and make no withdrawals across the month.
  • Each month the balance in the account must increase by a stipulated % or amount to qualify for the Bonus Saver rate.

The bonus rate offered on these accounts when you meet the monthly requirements is simply added to the accounts standard variable rate.

 

  1. Introductory rate saving accounts

An introductory savings account offers a bonus introductory interest rate when you open the account, with this introductory rate generally lasting for between 3-6 months, after which your savings rate will revert to the standard variable rate of your savings account.

 

  1. Kids savings accounts

Kids savings accounts are offered by all the major banks, credit unions and building societies, and operate in pretty much the same way as the basic adult account, though restrictions on withdrawals from these accounts tends to be tighter. Kids can make as many deposits as they like with the balance earning interest on a monthly basis, and incentives of higher interest rates are offered on some kids accounts where regular saving is rewarded with bonus interest rates.

There is no minimum age to apply for a Kids savings account though its common for the terms and conditions on these accounts to change once the child turns 12 or 16 depending on the bank.

 

How to select the best savings account

It’s a fair assumption that the best saving account has to be the one that offers the highest interest rate and so pays the most interest, though this focus on the size of the interest rate must be balanced with any conditions associated with receiving the highest rate. When making a savings account comparison you should absolutely be looking at the interest rate offered but this should be considered in conjunction with a range of other features which may impact your ability to receive this desired high rate:

 

Savings Account Fee

Some savings account charge administration fees on the accounts that will eat in to you’re the interest you earn on your savings. If no fees is a high priority, on line savings accounts are a good place to start as they tend to have no account fees, though some of these accounts will charge a fee if you use the branch to withdraw or deposit funds into your account.

 

Access to your savings

In general terms the less you withdraw funds from your savings account the higher the interest rate you will receive from the bank. If you believe you will need to access your savings account on a regular basis, consider savings accounts that feature high standard interest rates and offer frequent withdrawals.

 

Monthly deposit requirements

The majority of savings accounts require you to maintain a minimum monthly account balance or deposit a certain amount every month to receive the highest rate of interest available. Failure to meet either of these requirements the rate of interest on your account for that month will fall to a lower level or even receive 0% interest.

 

Linked accounts

On line saving accounts generally require you to have an account linked to your account to facilitate deposits and withdrawals. Sometimes this linked account must to be with the same bank, and sometimes you can link to any bank account.