Savings Account: Saves Money, Cuts Tax

Opening a savings account in UK is not easy, not because the avenues aren’t there rather it’s because there are too many of them! There are many different types of savings account options available for the consumer to opt for, few give you the option to make easy withdrawals but might offer you relatively low interest rates. High interest savings account might not allow you to make withdrawals on the spot. For immediate access one needs to give a notice period the duration of which can vary from a week to even few months!

There are various other features of these saving accounts other than interest rates. Like an easy access account, as the name suggests, is for making regular deposits and withdrawals. The interest rates vary with the base rate of Bank of England, this observation infers you will be offered comparatively lower rates and the amount you deposit in the account will be regulated. No such problem in a notice savings account as the interest rates offered are generally on the higher side. But then here you have to furnish a notice before withdrawals and in case of an emergency withdrawal or immediate access you may earn penalties amounting to the loss of interest earned on the amount withdrawn.

Savings accounts can also be your tax saving tool as Individual Savings Account (ISA) are accounts for which you don’t have to declare any income or capital gains to the government. The stock and share options allow you to invest in collective shares but avail it only if you can let your money float into the market for a good 4-5 years. But the cash amount or amount you put in shares is capped, Cash - up to £3,000 and Stocks & Shares - up to £7,000. Don’t try to act smart by opening more than one such tax free savings account as according to government norm only one ISA can be opened each financial year.

There are literally innumerable providers who offer these services, on the high street and over the web. They will leave no stone unturned to make you believe that you are the best and to lure the customers they will offer unlimited bonus and freebies but never ever forget to go through the fine print carefully. The catch behind the bonus promise is that it will be applicable for only for initial few months and after that ‘bonus’ period the interest rates will revert back to normal, which more often than not is lower! The fact of the matter is the consumer should stay aware about the new accounts introduced in the market. You need to keep checking various avenues through which you can make your money grow and if you can avail the best one then nothing like it.