There are so many different types of savings accounts to choose from that it can make choosing the right one for you tricky.

There are several factors to consider when you’re picking a savings account, including whether you might need easy access to your cash, or if you’re comfortable locking your money away for a year or longer, and how much you have to save.

Here, we look at the main types of savings accounts, and explain how they work, so you can find the most suitable one for your needs.

Questions to ask yourself before choosing a savings account

It’s important to choose a savings account based on your particular needs, so here are some questions to ask yourself before you start comparing rates:

Do you have a savings goal in mind?

Research shows that people who set specific savings goals usually save more money each month than those who don’t. Also, having a clear idea of what you’re saving towards helps you to choose the most suitable savings account.

For example, if you’re saving a pot of money for use in an emergency, such as a boiler breakdown, you’ll want an easy access account. However, if you’re saving for a property deposit to buy a house in five years’ time, you may be comfortable saving into a five-year fixed-rate account to benefit from a higher interest rate. Find out more in our guide How setting a savings goal can help you reach it.

Are you prepared to monitor your savings rate?

Some savings accounts offer attractive initial rates, only for these to decrease over time, reducing the amount of interest that savers can earn. If you’re not prepared to monitor the rate, say, every few months, you could find yourself earning dismal interest on variable rate accounts, such as easy access accounts.

Ideally, you want to shop around every so often to ensure you’re receiving the best savings rate. Otherwise, you may be better off choosing an account that offers a fixed rate for a certain period of time. You may also receive a higher rate this way, provided you won’t need access to the cash during the fixed-rate term.

How much are you planning to save?

The amount of money you are planning to save might affect the type of account you go for. Some accounts offer attractive rates, but only up to a set amount in the account, so it’s important to check you’ll receive the most interest you can on your cash.

It’s also important to know that if you are planning to put more than £85,000 into a savings account, you might want to consider splitting this between different banks or financial institutions. This is because under the Financial Services Compensation Scheme (FSCS), if your bank or financial institution goes under, your savings will be compensated up to £85,000 per person per financial organisation. Find out more in our guide Are my savings safe?

If you are going to split up your savings, be careful when choosing your financial organisations, as some banks operate under different names but are part of the same group, but you can check this using a useful tool from consumer group Which?.

Types of savings accounts​

Here are some of the main types of savings accounts:

Regular savings accounts

What is a regular savings account and how does it work?

Regular savings accounts, also known as monthly savings accounts, are usually offered by high street banks. As their name suggests, they are designed for you to pay money into on a regular basis (typically monthly) over a fixed period of time. Banks usually offer higher interest rates on their regular savings accounts in comparison to their current accounts, and occasionally they will also offer rewards for when you meet your savings goals.

You may have to make a minimum number of regular payments into the account over, for example, 12 months. You can then either take the money you’ve saved as a lump sum or transfer it to their standard savings account. Many banks don’t allow you to make withdrawals during the account term, so if you’re building up money for an emergency fund, this account might not work for you. Some banks restrict access to their regular savings accounts, so that only customers who also hold a current account with them are eligible to apply.

Who might want a regular savings account?

They are best for savers who don’t have a lump sum to put away, but rather would like to save a smaller amount on a regular basis. These accounts usually come with a savings limit of, for example, around £3,000 over 12 months. This can make them a great option for people who are looking to start saving for the first time or want to be more disciplined about their approach to saving.

What else do you need to know about regular savings accounts?

The high interest rates on offer are usually fixed for about 12 months, so if you’re looking to deposit a lump sum and benefit from the best rate on this over a longer period, a regular savings account may not be the right option for you.

Easy access savings accounts

What is an easy access savings account and how does it work?

Easy access savings accounts, also known as instant access savings accounts, do as their name suggests: they enable you to withdraw your money instantly, whenever you wish (although there may be limits on the number of withdrawals per year).

Who might want an easy access savings account?

Easy access savings accounts are a great option for savers needing a pot of money that they can easily dip into, possibly for emergencies or unexpected expenses, such as a car or boiler repair.

What else do you need to know about instant or easy access savings accounts?

Interest rates on easy access accounts aren’t generally the most competitive, so if you’re looking to earn a higher rate of interest, and definitely won’t need access to your money over the short term, they might not be the right account for you. There may also be some limits on the number of withdrawals you can make each year so make sure this will suit your needs.

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Cash ISAs

What is a cash ISA and how does it work?

Cash Individual Savings Accounts (ISAs) are tax-efficient wrappers that you can hold savings in with any interest you earn not subject to tax. You also don’t need to declare your cash ISA savings on your tax return.

You can only pay £20,000 into an ISA in the 2023/24 tax year and at the start of each new tax year, you get a new ISA allowance. There are other types of ISAs you can save into, including stocks and shares ISAs, and the Lifetime ISA.

Like standard savings accounts, there are different types of cash ISAs, from easy access to fixed-rate options. The highest interest rates are often available on the longer term fixed-rate accounts, but not always. For example, the best deal on a one-year fixed cash ISA is currently 4.17%, compared to 4.05% on a five-year fixed-rate, according to Savings Champion (rates correct at time of writing). You can read more about the different types of ISA and how they work in our article Everything you need to know about ISAs.

Who might want an ISA?

Saving into a cash ISA is a simple way to keep your savings free from tax. However, these days, they are only really useful for cash savings if you’ve got a substantial amount to save. That’s because the introduction of the Personal Savings Allowance (PSA) in 2016 means that basic rate taxpayers can receive up to £1,000 in interest before paying tax on their savings. Higher rate taxpayers can receive £500 worth of tax-free interest, while additional rate taxpayers cannot receive any. According to estimates from the government, the PSA means that 95% of savers won’t pay any tax on their savings interest.

What else do you need to know about cash ISAs?

For the majority of savers, there is little point savings into a cash ISA since the introduction of the PSA, which already enables you to earn tax-free interest. It’s most important to get the best rate on your cash savings, and cash ISAs may not offer this, so shop around.

Bear in mind, too, that if you’re saving into a fixed-rate ISA you won’t be able to access your money for a certain period of time, sometimes up to five years, so you need to be comfortable that you don’t need that money during this time. Some ISAs are flexible and let you withdraw money and put it back in within the same tax year, but check the account terms and conditions.

You can have a look at some of the best Cash ISAs on the market at the moment in our article Best Cash ISA rates – Which cash ISAs pay the most interest?

Notice Accounts

What is a notice account and how does it work?

These accounts require you to give notice when you want to make a withdrawal. You have to notify your bank or provider and your request can take anywhere from 30 to 120 days to process. With a notice account, you should be able to deposit money whenever you want, whether that’s as a lump sum or drip feeding it in.

Who might want a notice account?

These accounts aren’t as well-known as other types, such as easy access or fixed-rate accounts, and they aren’t as widely available either. However, they may be a good option for savers who want to avoid dipping into their savings, and who have a specific goal such as buying a house or paying for a wedding. They can also be generally useful for people who want to make it a bit harder for themselves to spend their money.

What else do you need to know about notice accounts?

You may be able to access your savings without giving the required notice if you’re willing to pay a penalty, which is usually a reduction in interest. Bear in mind that notice accounts used to offer higher interest rates than easy access accounts, but this isn’t necessarily the case anymore, so always shop around for the best rate on your savings.

Fixed-rate bonds

What is a fixed-rate bond and how does it work?

This type of account may be given a variety of names, including fixed-rate savings accounts and fixed-rate deposit accounts. However, they are most commonly known as fixed-rate bonds that pay out a fixed rate of interest for several years. In fact, they’re not bonds in the true sense of the word – they’re really just fixed rate savings accounts. An actual bond is an IOU for a loan you’ve given either to a company or the government. You can find out more about how those types of bonds work in our guide What are bonds and how do they work?

The longer you are willing to lock your money away, the better the rate tends to be. You can get anything from one-year to five-year fixed-rate bonds. However, you need to make sure you are comfortable with not having access to your money for that period of time.

Who might want a fixed-rate bond?

If you have a longer term savings goal in mind then a fixed-rate bond could be a good option for you. They offer higher rates of interest than easy access savings accounts, and in many cases do not have an upper limit of how much you can pay into them so they are a good account if you’ve got a lump sum to put away that you’re happy to leave untouched for a while.

What else do you need to know about fixed-rate bonds?

While the rates of interest on fixed-rate bonds tend to be pretty attractive in comparison to other types of savings accounts, you might have to pay tax on the interest you make if your total savings income exceeds your Personal Savings Allowance (but you’d need a large amount saved to breach this – see above). You can find some of the best fixed-rate bonds in our article Fixed-rate savings bonds explained.

Help to Save accounts

What is a Help to Save account and how does it work?

Help to save is a type of savings account for people who are receiving Universal Credit or Working Tax Credit and it’s designed to help people on low incomes to start saving.

A Help to Save account, once opened, will last for four years, over which time you can save anywhere between £1 and £50 each month, or a total of £2,400 over the term.

Rather than offering a specific interest rate, a Help to Save account will give two bonuses paid by the government over the course of the four years, which are paid into your bank account rather than your Help to Save account. The first bonus is 50% of your highest balance over the first two years. The second bonus will be paid after four years, and will be 50% of the difference between your highest balance in the first two years and the highest balance in the last two. Essentially these bonuses amount to an extra 50p for every £1 you save, which if you pay in the maximum amount means you could earn a maximum of £1,200 in bonus payments.

You can withdraw money from your Help to Save account whenever you want. However, bear in mind that as the bonus is based on how much you have saved, you can maximise this by continuing to grow your balance over the four years.

Who might want a Help to Save account?

Low-earners who meet the eligibility criteria and want to start saving with the benefit of a government bonus might be interested in a Help to Save account.

To be eligible for a Help to Save account you will need to be living in the UK and either:

  • Receiving Working Tax Credit.
  • Entitled to Working Tax Credit and receiving Child Tax Credit.
  • Claiming Universal Credit and you (with your partner if it’s a joint claim) and earning £617.73 or more from paid work in your last monthly assessment period.

You don’t have to be claiming or receiving one of these benefits for the entire time that you have your Help to Save account, so if you stop receiving benefits at any point, you can continue to use and save into your account.

What else do you need to know about Help to Save accounts?

It’s important to note that whatever money you build up in savings could affect your benefits payments. For example for both Universal Credit and Housing benefits, if either you or your partner have more than £6,000 in savings this could affect your benefit payments.

While you won’t be able to save more than £2,400 into the Help to Save account, it’s worth considering how you would cope if you lost this income.

You can read more about Help to Save accounts and see how to apply on

Sharia-compliant savings

What are Sharia-compliant savings and how do they work?

A Sharia-compliant savings account offers similar benefits to an average savings account, as you can deposit and grow your savings over time. The key difference is that rather than earning interest on your money (which is against Islamic law), with Sharia savings accounts you will earn a profit which is generated from completely transparent, ethical, Sharia compliant trading activities.

Who might want a Sharia-compliant savings account?

It is not just people who follow Islamic law who might be interested in a Sharia-compliant savings account. Savers who don’t want their bank to lend their money to businesses that may be considered unethical, such as alcohol, tobacco and gambling, which are against Islamic principles, may also consider this type of account.

What else do you need to know about Sharia-compliant savings?

You do not need to be Muslim to use Sharia-compliant banks, as they are open to anyone who wants to use them. There are a number of Sharia-compliant banks that offer services to UK customers including Al Rayan Bank and Bank of London and the Middle East (BLME).

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