Savings and Savings Accounts

Why save?

You could be putting money aside for something special like a new dress or summer holiday spending money or maybe you just like to save some. Whatever the reason saving is a good habit to get into.

Saving a little, often, will hopefully mean you can get all the things you want and will have money when things happen unexpectedly - your bike needing fixed or being asked to go on a holiday.

Good saving habits should hopefully help you to avoid debt and help you manage your money successfully.

What's a savings account?

A savings account differs from a current account in that it has a higher interest rate than a current account. This means you can make money from the money you have in your account. The longer the money is in the account and the more you save, the more interest you’ll earn.

However, savings accounts don't mean you can never touch your money again - most will allow you to access your money fairly easily if you need it. When you open the account, make sure to check what the terms are: some accounts can require 90 days notice, while some will limit the number of withdrawals you can make each month.

Saving for a rainy day is always a good idea, if you can afford it. You don't have to save a lot each month, but if you are planning on saving it's worth opening a separate savings account. You'll get a higher rate of interest and you won't have to worry about accidentally spending your savings.

What do I get with a savings account?

• Higher interest rates.
• A passbook recording all your transactions.
• 8-10 year olds can get more control of their account. 
• 11-15 year olds can get a card - allowing limited cash withdrawals. 
• Access to cashline machines for withdrawals. 

You can open a high interest account at a post office, bank, building society, and some supermarkets. Shop around, speak to other people, and get as much information as possible to find out what's best for you.

Is it safe?

If something goes wrong with your bank, the government will guarantee your savings up to £50,000, so you don't need to worry about losing them.