When you have extra cash, it is important to save some of it. This may help you in achieving a goal such as buying a vehicle, a house, or paying for a holiday. How you save your extra money will be dependent on what you are saving for, your spending habits, and how much you can afford to save. Below are some of the different savings accounts you can choose from.

Cash ISA

An ISA is an Individual Savings Account. Cash ISA’s are instant access accounts that pay a variable rate of interest. Each provider pays their interest rate and the rate can change at any time. Savers have an allowance of £20,000 they can save into their cash ISA or can spread the allowance over different types of ISA such as stocks and shares ISA. You do not pay any tax on interest earned in an ISA. You can withdraw your money at any time. However, the money you withdraw can still count towards your £20,000 allowance if your ISA is not flexible. You can find out more here.

You can transfer your cash ISA from one provider to another provider at any time. You can do this by contacting the ISA provider you want and filling out an ISA transfer form. The transfer should take a maximum of 15 days for a cash ISA.

Easy Access Savings Accounts

An easy-access savings account is an account that can be accessed at any time and pays interest. You can normally open one with a small amount which varies depending on the provider. This allows the flexibility of adding to your savings whenever you want while allowing you to withdraw the money when you need to.

This account is great for those who are just starting, and those on lower incomes. Although interest rates in savings accounts that are easily accessible normally have lower rates of interest.

Notice Savings Account

Notice accounts are good for savers who do not need instant access to their savings. Normally these accounts carry higher interest rates however, there is a notice period you have to give the financial institution if you want to withdraw your savings. The shortest period available is normally 30 days and some can be as long as 120 days, but this can vary depending on the type of account and the provider.

Some accounts may restrict the number of withdrawals that can be made in one year.

Regular Savers Account

A regular savings account is an account where you commit to paying a certain amount each month. This amount can vary between £10 and £500. You may have to pay in a set amount every single month for a fixed term e.g. 1 year. At the end of the fixed term, you receive back the money you saved, and any interest earned on top. They normally offer a higher rate of interest than an instant access account however, the interest and the amount you pay in will differ based on the provider you choose. Some accounts may offer a lower interest rate to allow for withdrawal within the fixed period, while other accounts do not allow for any withdrawals.

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