How to get the best savings bonuses

If you're going to be opening a new savings account, savings bonuses are probably on your mind as well as which banks are currently offering them.

In fact, many of the top banks offer them as they're a great way to encourage new customers. And in the last couple of years, short-term savings bonuses have been getting bigger too.

But to get the best savings bonuses and not be fooled by the bank's promises, here's what you need to know.

Savings Bonuses Aren't Always What They Seem

Read the Small Print - Don't get caught up in the excitement of getting a good savings bonus when you open a new account. Make sure you read the small print. Some banks are offering higher-than-normal savings bonuses but, once the bonus term ends, the interest rate on the account falls below most other banks' normal rate. You don't want to open that kind of account as the long-term benefits are far worse than any short-term gain.

Open a No Notice Account - Unless you are absolutely sure you won't need the money, opening a no notice account with a savings bonus is better than a notice account, even if the interest rate and bonus is slightly lower. Circumstances change and if you suddenly need to withdraw money and can't give the bank notice, a notice account will have penalties, and they might include losing your interest. So you end up worse off.

Check if Account Has Conditional Bonus - Some banks offer a higher rate of interest than others because they include a conditional bonus in the rate. What that means is, if you can meet the conditions e.g: only make withdrawals a certain number of times, you will get the higher interest. If you can't, you won't.

Review the Rate at End of Bonus Term - If you do manage to get a good savings bonus on any account, when the bonus term is over make sure you review the interest rate. You might find, now you've lost the savings bonus, it's more beneficial to move your money to another bank offering a savings bonus rather than keeping it where it is.

Are Savings Bonuses Worth Getting?

If you read all the small print and know exactly what a bank is offering you, savings bonuses can be a smashing way of getting a little bit more interest.

If, however, you are not careful, even if you get a decent savings bonus to start with, if the interest rate at the end of the bonus term is pitiful, you could end up better off keeping your money at home under your bed.

Be a smart investor. It is possible to benefit from a savings bonus, as long as you educate yourself before committing to anything.

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