Saving is the practice of storing away money for future use. There are lots of different savings accounts so here is some guidance on your different options.
Deposit- This is where you store money in a savings account and it gains extra money called interest which is a %. This interest is counted as part of your income so you do have to pay tax on it, this is deducted by the bank you have the account with.
Investment- You put money into an account and it is invested by the bank into stocks and shares. Then when youy take the money out you get the sale price wiyth some deductions for the banks services. This type of saving carries more risk as you might not get all the investment you put in however in some cases you might get more than you put in. This risk is reduced if you are investing over a long period of time or don’t have a specific time of withrawal as this means you can ride out the waves of the stock market.
Regular saving- This is where you make a regular investment into a savings account normaly monthly, check the conditions of these accounts as you may lose interest if you don’t keep up with regular investments. This is a great way of building up a savings pot.
Lump sum- This is where you store a block of money away and leave it there for a period of time. Check the conditions of these accounts as some only allow one lump sum investment while some allow more.
Instant access- Flexible account where you are able to take money out of your savings account whenever you want without losing interest. However you tend to get lower rates of interest with these accounts.
Notice accounts- This is an account where to withdraw money you have to give notice to the bank, check the conditions of these accounts as some you can access without notice but you lose interest and some you cant withdraw for a certain period of time.
Long term- these are savings account that are designed to be open for a long period of time and will have little to no value if you access them early. These are usually investment accounts.
Tax free/ISA’s- These accounts allow interest to be paid without tax deductions, but there is a yearly limit on savings made in this account.
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