There are three basic types of savings accounts: easy access, term and notice savings accounts, but which provides the best saving rates?
The best savings account for you depends on the type of access you require to your money and how you like to run your account.
Best saving rates – Easy access
Easy access savings accounts give you access to your money when you need it. The best savings rates are generally paid on accounts you run over the internet, although with the right savings account you can also earn good rates on those you run through a branch, or post or over the telephone.
On internet and telephone savings accounts you can switch your money easily between your current and savings accounts, but it can take a few days for the money to reach the account.
Term savings accounts
Term accounts may be the best savings account for you, if you’re happy to tie your money up for one, two or three years. Some let you take money out during the term if you decide you need it, but you will lose interest if you do.
In return for tying up your money you earn a fixed rate of savings interest over the term. These accounts often pay the best savings rate but there is a wide gap between the best savings account rate and the worst.
Notice savings accounts
With notice savings accounts you have to give the bank or building society warning – typically two or three months – that you want to take money out of your savings account. But they can change the interest rates at any time without giving you warning. Some of these savings accounts have been around for years and pay very poor interest rates.