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Setting savings goals is one of the best ways to become more disciplined about putting money aside regularly. With a clear target in mind and a specific deadline, you’re more likely to stay focused and motivated to reach your financial objectives
Most of us have several savings goals we’re aiming for at any one time, and the right account for each will depend on when you’re likely to need to access your money, as well as how much and how regularly you’re planning to save.
For example, your goals might include building an emergency fund for any unexpected expenses such as boiler breakdowns or car repairs, or you may want to put money aside for a holiday or new car or simply be planning for retirement. Whatever your objectives, choosing the right home for your money is crucial. With various options available, it’s important to find an account that suits your specific needs.
Here, we explore the best savings accounts for your goals, to help you work out which type of account is likely to be right for you.
Different types of savings accounts
There are numerous different types of savings accounts available – here’s our rundown of some of the most common.
1. Cash individual savings accounts (ISAs)
If you’re looking for a tax-efficient way to save, Cash ISAs offer a way to grow your savings without paying any tax on the interest. This tax year, which finishes on April 5, you can contribute up to £20,000 into a cash ISA, but if you don’t use your allowance, it will be gone for good. However, you get a new £20,000 ISA allowance when the 2025/26 tax year starts. Cash ISAs can be both Easy Access or Fixed Term accounts, so can be suitable for a range of savings goals.
Best for: Short, medium or longer term goals
You can open more than one of the same type Cash ISA in any tax year. So, for example, if you want to tie some of your money up for a longer-term purpose, such as a home or garden improvements, but you also want some savings that are readily accessible as an emergency fund, you may decide to put half your ISA allowance into a Fixed Term Cash ISA and the remainder into an Easy Access Cash ISA.
Boost your savings with 4.32% AER1
Make your money work harder with an OakNorth Easy Access Limited Edition account. For a limited time, you can get access to an even higher interest rate.
1Annual Equivalent Rate correct as of 05 Mar 2025 and subject to availability. Terms and conditions apply. Minimum balance required for Limited Easy Access account is £20,000.
2. Easy Access savings accounts
As the name suggests, Easy Access savings accounts usually allow you to withdraw your money at any time without penalty. This makes them one of the most flexible types of account as you can usually dip into your savings at any time. Make sure you read the small print carefully before signing up for an Easy Access account, however, as not all accounts have the same terms and conditions and some may restrict the number of withdrawals you can make despite being marketed as Easy Access.
Rates on Easy Access accounts are variable rather than fixed and therefore can increase or decrease over time.
Best for: Short-term saving goals
If you’re trying to build an emergency savings fund, or are saving for a short-term objective such as a holiday, a birthday or Christmas, for example, an Easy Access account is likely to be your best bet. Make sure you shop around for an account paying competitive returns as rates can vary widely depending on which provider you go for.
3. Fixed Term savings accounts
With a Fixed Term account, you agree to tie up your money for a set period (typically from six months up to five years) at a fixed interest rate. While this type of account may offer higher interest rates than Easy Access accounts, you won’t usually be able to access your money without penalty until the term ends.
Best for: Short, medium or longer term saving goals
As the interest rate on fixed rate savings accounts is locked in for the term of the account, these types of accounts are perfect for more rigid short, medium or longer-term goals, as they can provide peace of mind that you’ll know exactly how much you’re going to end up with once the account matures. They can also be helpful if you want to avoid the temptation of being able to access your savings.
4. Notice accounts
Notice accounts typically require you to give advance notice (usually 30, 60, or 90 days) before you can withdraw your money. They are therefore not ideal for very short-term goals where you might need immediate access to your savings, but they can strike a balance between earning more interest and having controlled access to your money.
Interest rates on notice accounts tend to be variable, and some savings providers such as OakNorth offer the option of a base rate tracker notice account, which tracks movements in the Bank of England base rate plus or minus a set percentage.
Best for: Short to medium-term savings goals
If you’re saving for something in the next few months, such as a new car, or higher education costs for teenage children, a Notice account can potentially provide better returns than Easy Access savings accounts, while giving you the ability to access your funds provided you can give notice.
Boost your savings with 4.32% AER1
Make your money work harder with an OakNorth Easy Access Limited Edition account. For a limited time, you can get access to an even higher interest rate.
1Annual Equivalent Rate correct as of 05 Mar 2025 and subject to availability. Terms and conditions apply. Minimum balance required for Limited Easy Access account is £20,000.
Things to consider when choosing a savings account
Whichever type of savings account you choose, there are several key factors to consider first.
First, and most importantly, make sure you always compare interest rates across different providers. Even small differences in rates can have big impacts over time, especially if you have a high level of savings.
You should also scrutinise account small print carefully, and look out for any restrictions, such as minimum deposit requirements, withdrawal penalties, or limits on the number of withdrawals you can make each year.
Always ensure that any account you choose is protected by the Financial Services Compensation Scheme (FSCS), which guarantees your savings up to £85,000 per person, per financial institution.
Taking the time to compare different accounts can help you ensure that your money works as hard as possible for you so you can achieve your savings goals, whatever they might be.
