Helpful Banking – Types of Savings Accounts

Different Types of Savings Accounts

By moneywise Elena Price

There’s been a lot of activity going on in the savings markets recently – especially in the fixed rate bond arena where a number of providers  have launched products with higher rates.

Top Banana visited the Ulster Bank’ s Helpful Banking pages to find out more about what are the differences between different types of savings accounts and what sort of saver do they each suit?

The following products are widley available for savers.

Fixed Rate Bonds

Fixed rate bonds are usually quite inflexible so won’t suit everybody.

These accounts are fixed on two aspects – the length of the agreement, how long you have to lock your money up for and the other is fixed on rate – the return you get on your deposit.

Generally you aren’t able to make a withdrawal during the term which will be a drawback for some people.

Some fixed rate bonds only allow a single deposit and therefore suitable for lump sum investments.

Regular Savers Accounts

These are s avings accounts that usually pay better rates than instant access accounts but are designed for people who want to put money on a regular basis

There are basically two types of these accounts:

Term based where its fixed by nature and the other are transactional based accounts that allow savers to put money in and take money out.  Generally regular savers are term that usually look at a fixed period.

Regular saver accounts are the most onerous and you need to look carefully at the terms and conditions of the account NOT just the rate.

Easy Access Accounts

If you need a savings account that you can dip in and out of then an easy access account – this is a popular type of savings account. Sometimes called rainy day where you can keep your money safe, hopefully, get a rate of return on it and be able to dip into it when you want.

What a lot of people do is to save for specific things – say a depsoit for a car, home improvements a holiday and you put money away towards it.  Of course if access to these savings is easy you can take your money our free of any penatlies so there is a tendancy to dip into them more often.  If people need to be more disciplined then they check terms and conditions and consider a regular saver account.

Things to be aware of with easy access deals.

Bonuses which if they are fixed are good in a varialble market.

Some products may penalise you for withdrawals – maybe allowing a certain number of withdrawal in a year

Notice Accounts

Notice accounts are now a lot less popular than they used to be.

Conclusion

Ideally a spread of savings accounts – easy access and flexible

Across most product types are ISAS – a tax free wrapper for investments and savings

A combination o f savings and investments is a good idea if you can afford to lock some away and also put some in a more flexible account that you can access if you need to