subject: All Regular Savings Accounts Are Not Created Equal [print this page] With the Bank of England holding its base rate at a record low, and with the rate of inflation creeping higher and higher, you might feel as if saving your money is a hapless task. Not only do you have to combat banks passing on the low base rate to consumers in the form of low savings interest rates, but you're also stretched thin by inflation so how are you to put away any savings at all?
Saving in hard economic times is, well, hard. But you shouldn't lose hope. You'll find that some banks offer rather competitive savings rates despite the low base rate. Obviously, you should look for savings accounts that yield high interest, but likewise you must consider your personal situation. To get some of the best savings rates around, you might want to consider regular savings accounts. Regular savings accounts require you to put away a certain amount of money each month by standing order. Don't fret if you don't have much extra cash to set aside, because these types of savings accounts are generally aimed at people who want to put small sums away. You could put away as little as 10 a month!
Regular savings accounts are a simple solution to savings, because they suit people who don't have a lump sum of money to put away all at once in long-term bonds or investments you don't have to be a savvy investor with a vast portfolio instead they encourage savers to put smaller amounts away in a higher-interest account regularly. But these accounts still offer higher-than-average savings rates. On the flipside, the ceiling on the amount of money you can put in them each month is rather low (think 250 on average) and some regular savings accounts don't allow you to withdraw any money for a fixed term, generally a year.
But on to the technical bit all regular savings accounts are not created equal. Some allow you to have instant access to your savings, generally at a price that price being lowered savings rates in the months you make withdrawals. And the variance in the savings rate between regular savings accounts can appear extreme. Currently, you might find one regular savings account offering an outstanding-sounding savings rate of 8% while others typically offer rates hovering around 3.5%. Not to mention some accounts have fixed savings rates while others have variable ones. Some require you to hold a current account with the provider bank while others don't.
Ultimately, you should research the terms of all regular savings accounts before committing to one. Make sure they suit your needs. Ask yourself, might you need instant access to your savings? Are you interested in saving an amount higher than 250 per month? Does your current account provider offer preferential savings rates to its existing customers? Do you want the security of a fixed savings rate? Once you answer these questions, you'll be well on your way to finding the best regular savings account and once you start saving to building your wealth.
