Choosing a savings account

A quick overview

Learn about the different savings account options available, including fixed-rate bonds, ISAs and variable-rate accounts. This video explains how interest rates work and how to choose a savings account that meets your individual needs.

Transcript

When choosing a savings account, you can choose a fixed-rate account, such as a fixed-rate bond or a fixed-rate ISA. If you choose a fixed-rate savings account, your interest rate would stay the same for the term of the account.

You may also have the option to select a savings account that offers a variable interest rate. This means your interest may go up and down—for example, following changes in the market or changes to the Bank of England base rate.

Some banks and building societies also offer tracker rates, which are variable-rate accounts that are linked directly to the Bank of England base rate. These will go up and down as the base rate increases or decreases.

How to Choose the Right Account

How do I know what's right for me? To determine what's right for you, you'll need to assess your savings goals and objectives. Then decide which option is best suited to your current and future needs.

It's also important to consider when you might need to access your money as some may allow withdrawals, some limited withdrawals, and some may not allow any withdrawals or closures during the term.

If you're going to need access in the short term, you might not want to choose a fixed-term account for five years where you'll be unable to access the money for the five-year period.  For some accounts, you will only be able to access it early by incurring a penalty.

It's important to check the terms and conditions to make sure the savings account is going to meet your individual needs.

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