How to choose the right savings account

How to choose the right savings account

I am pretty good at saving for what I want. Delaying gratification in a monetary sense is something I do easily (not food though!) For many people saving is tricky, whether it be saving to pay their tax, for a holiday , birthday , wedding or a new car some people find it hard not to spent any extra cash  on this or that rather than save it to reach their bigger and longer term goals.

In my opinion Savings Accounts are beneficial for everyone. Everyone could do with some money put away for a rainy day/the future/emergencies.

 

How to choose the right savings account

 

I believe in teaching children to save from a really young age, just little bits, but so they can see the pleasure in it mounting up. No toy ever is as good as one you have longed for and saved up for.

I like fixed rate savings.

Fixed rate bonds are ideal for people who like the idea of saving with a known rate of return. They pay a fixed rate of interest during the term and let you have access subject to a loss of interest charge. For me this is ideal I know exactly what my return will be and it is highly unlikely I will need to withdraw the money before the term is up.

For people who lead more chaotic financial lives, or just people who are more spontaneous and who may need access to their money suddenly, this could result in an unfortunate loss of interest. You have to weigh up the risk.  I know for myself the risk I would pull out my savings suddenly would be low. I may have to do it an emergency (roof fell in, funeral) but I know I wouldn’t be pulling it out for a holiday for example.

Fixed rate bonds are I think for people with a conservative and steady approach to their finances. You have to know yourself in order to work out the best way for you to save.

How do you choose?

 

 

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