If you have money that you are interested in saving, then you may wonder whether the best place is to put it. There are lots of banks and buildings societies that offer savings account and they may have a choice of types of account. It is best to choose the type of account that you want first and then compare the different providers to see which has the best interest rate. Therefore, below is a selection of types of savings accounts with information about them, so you can learn more. This is not an exclusive list though, so there may be others available too. Once you choose a type of account you can then compare providers to see which looks best.
Instant Access Account
An instant access account will allow you get your money out as soon as you need it. This means that you will be able to use it to pop money in and then get it out again as soon as you need to spend it. You will not have to worry about whether you will need the money and what might happen if you cannot get it quickly, which could be a problem with accounts where you tie your money up. This type of account is likely to pay a pretty low rate of interest though and it will be variable which means that the provider can change it whenever they like and it is likely to go down more often than it goes up.
A notice account is normally set up so that you have to give notice of a certain amount of days before withdrawing the money. This could be 30, 60 or 90 days, for example. If you take the money out without giving notice you may not get any interest or you may lose a bonus. The accounts are set up in different ways depending on who you go through and for some you will just not be able to make early withdrawals at all. These will usually pay more interest than an instant access account. The interest on these accounts could be a fixed amount but it is more likely to be variable and be changed by the provider every so often.
Fixed Rate Bond
A fixed rate bond will have an interest rate that is fixed for the term of the bond. So, it might be for one, two, three or five years, for example and the interest rate will remain the same for all of that time. This can be good if the rates are very low and the fixed rate bond has a pretty good rate compared to the rate on other savings accounts. However, if you think that the interest rate is likely to rise above this amount during the term of the bond then it may not be wise to tie the money up in one. You will be unlikely to make withdrawals from the bond although some may allow a few, it will depend on the rules of that particular product.
An income bond will pay interest out into another account. You will normally nominate a current account and you will get a payment into it each month. The lump sum in the bond will stay the same and so you will tend to get the same amount paid into the account each month. However, you will find that this will have a variable interest rate and so the amount of income received will vary if the provider decides to change the rate. This is great if the rate goes up but if the rate goes down, then this will mean that the income received goes down.