Savings Accounts: Things to Think About Before Choosing Yours

If you’ve ended up here, it’s probably because you’ve decided it’s time to start saving. Which is a great first step.

Next, you need to decide how you want to save and the type of account that’s best for you. Thinking about your circumstances and the end goal will help you to figure it out.

Choosing what type of savings account you need is ultimately down to you, but if you need some inspiration, you’ve come to the right place.

Let’s talk about what you’re saving for. Do any of these sound like you? 

I’m looking at Savings Accounts for Me – I Want a House.

If a forever home is what you’re after, the best fit would be the Lifetime ISA. The LISA was created as a replacement for the Help to Buy ISA.  It’s a great way to save with a massive annual boost of 25% from the government, plus our 3% interest on top. You’ll be on the way to your dream house!

You can find more information, including T&Cs, and how to apply for a Lifetime ISA here.

What are my Options When I Turn 18 and Get My Child Trust Fund?

So, your Child Trust Fund (CTF) is about to mature? Chances are you’ve never had that much money land in your lap before. You’ve got options; you could save it, spend it or do a bit of both – it’s definitely worth giving it a think over before you decide.

When your CTF matures, you could choose to put a chunk (or all) of it into a Lifetime ISA, to give yourself a head start on saving for a house (scroll up for more info) or a Flexible ISA, to save for something like your first car, or to go travelling in your twenties.

Keep reading to have a look through all your savings account options and some inspiration on what to do with your CTF. You can find out a little more about your CTF here. 

I Have Money I Want to Put Away Now and Add to – But I’ll Need to Know I Can Access it if I need to.

A Flexible ISA (FISA) is the go-to for those who need their money somewhere they can reach it. Many people who open Flexible ISAs still save a really good sum of money, but have the peace of mind that they can use it as an emergency fund.

You can add to your account or access your money whenever you need to, and you can top it back up any time within the same tax year.

FISAs are a good fit for a longer term investment that you can build on over time. Your money is invested in stocks and shares, which means you could get back more or less than you put in. We can’t guarantee how much you’ll receive when you choose to withdraw, but it certainly shouldn’t put you off. You can have a look through the T&C’s here.

I’m looking at Savings Accounts for Children

To save for little ones, you’ll want to look at a Junior ISA or a Children’s Savings Plan.

Junior ISA

A Junior ISA is a Stocks & Shares investment that your child or family member will have access to when they turn 18. You can invest with as little as £1. You can add an annual lump sum or a regular monthly amount from £10. It’s a great wat to give them a kick-starter fund as they reach adulthood.

As with the majority of Stocks & Shares accounts, the amount you invest could go up or down over time.

For more info, including T&Cs and how to apply for a Junior ISA, click here.

Children’s Savings Plan

With a Children’s Savings Plan, you can put away between £9 and £25 a month for up to 10 years for the little one in your life. The amount you invest has the potential to grow and earn bonuses depending on how regularly you add to the account.

For more info, including T&Cs and how to apply for a Children’s Savings Plan, click here.

I’ve Got Some Money I Want to Invest and Earn Interest on

Sometimes it’s easier to just get the money out of your current account so you won’t think about it until you hit your goal. Out of sight, out of mind. And if you earn some interest and bonuses, you’re onto a winner.

If you’re looking to do this for a short to medium period, a Guaranteed Investment Bond (GIB) could be a great fit. 

A GIB is a 5 year, 100% protected investment, in which you can put away an annual lump sum to get some money together.

For more info, including T&Cs and how to apply for a Guaranteed Investment Bond, click here.

What About Saving for Something Like a Car, Travelling or Retirement?

If you’re looking for a relatively short term savings account – a Flexible ISA or Guaranteed Investment Bond would be a great fit.

The main thing you need to think about when choosing between the two, is ‘will I need to access the money in my savings account in the next 5 years?’

If you’d prefer peace of mind that you can dip into your account any time and top it up later, a Flexible ISA may be the way to go.

If you would prefer to have your money somewhere else until it reaches maturity, a Guaranteed Investment Bond may be a better fit.

If you’re still feeling unsure about savings accounts that would suit you, just remember the key questions:

What am I saving for?

Will I be tempted to dip into the account if I can do so with ease?

Do I need the reassurance that I can access my savings if I need them?

What could this money become if I invest it?

If you couldn’t settle on just one of these, it’s worth noting that many of these savings accounts can work together in perfect harmony. If you don’t have the budget right now to be putting savings in two accounts, simply prioritise what’s the most important to you in the short term, and give us a shout if you’d like information about opening another savings