Have You Got the Right Savings Account?

It is widely agreed that in the current economic climate that saving, rather than borrowing, is the wisest choice. However, low interest rates mean it can be difficult to get a decent return on your savings so it is important to find the best savings account for you.

There are hundreds of savings products on the market and the chances are that if you look around you will find a better deal. The best place to start is to take a look at the return you are getting on your money so check the interest that is being paid on your account and compare it to other savings products.

While interest rates are the first thing you should look at, and are a good indicator, they are not the only thing you need to take into account. Look closely at the fees charged by your existing savings account and competitors. There are plenty of high interest savings accounts around that charge no fees at all so you can afford to be choosy.

Another factor you should look at is how interest is calculated and paid. The more frequently it is calculated, the faster your money will grow so look for an account where interest is calculated daily and paid at least monthly.

Interest rates and the return investment is probably the most important consideration when determining whether you have the right savings account, but it is not the only one. A lot will depend on your personal circumstances and how much flexibility you are willing to sacrifice.

For example, if you really want a high return on your money you could consider a term deposit. These offer good interest rates but basically amount to binding contracts with banks. With term deposits you will be required to make a minimum deposit, you will be limited in how much you can lodge, and you will have little or no access to your money until the contract is complete.

In general, there is a direct trade-off between returns and flexibility. The more access you want to your money the lower the returns on your investment. If you can afford to make a large initial deposit and won’t need to access your money for a year or two, you can find some excellent rates of return.

However, if you do not want to make a minimum deposit and want access to your savings when you need it, you should examine online high interest savings account. These accounts, which can only be opened and managed on the internet, offer the best of both worlds – high interest rates and a good deal of flexibility.

A good online high interest savings account should also offer free, or no, fees and charges, have telephone and online banking facilities, and allow you to link your savings account to any other accounts of your choosing. Many of them will also allow you to open an account with no minimum deposit and access your money whenever you want.

So, the best savings account for you depends on your personal preferences. There is a product out there to suit every situation, so you can get your money working for you.