A Guide to Opening a Saving Account

Nobody knows what waits around the corner, which is why putting some money to one side in a saving account is so important. You need to decide if you want to put a lump sum away, put a certain amount in each month or simply save as much as you can before making a deposit.

Some saving accounts can be opened with as little as £1.However, most accounts expect you to either deposit a lump sum or commit to a fixed amount you can deposit each month. Before opening an account, you will need to seriously consider how much you can afford to save each month. Leaving your savings in an account means interest accumulates on your money, making your savings grow.

Even small but regular payments in to your account will soon add up. Other things to consider before opening a saving account include, whether you want your interest paid annually or monthly or whether you would prefer your account to have a fixed interest rate.  An alternative to a saving account is any one of a number of investment products. These will offer you a much bigger return over a longer period.

However, they are seen as risky and should not be considered if you could not afford to lose what you put in. The Halifax bank has a Reward Current Account, which rewards account holders, who deposit £1,000 monthly, with £5 in their account each month.

If you need to take out an overdraft on your account, they charge you daily for the facility as oppose to monthly. Lloyds TSB offer people the chance to apply for their easy saver account. Just a basic saving account, the easy saver offers a competitive 1.60% AER and can be opened with just a £1. Interest is paid annually and you can control your account via your local branch, telephone or online.

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