If you have savings, then it is a good idea to put them into a savings account which is earning a decent amount of interest. There are a lot of savings accounts available and they differ in the interest they offer. It is well worth doing some research so that you can find the account which provides the best interest as this means that you will get the best return on your money. When you want instant access to your money it means that you will be limited in the amount of interest that you can get. You will get more interest if you are prepared to put your money into a notice account or tie it up for a year or more. However, we will want to have some money available to use that we can get to quickly so that we are able to use it when we need it. Therefore, looking for an instant access savings account is a good idea. They do vary though and it is good to know the differences between some of the types so that you can choose what is right for you.
A standard savings account will pay interest normally monthly or yearly and add it to the account. This means that you will be able to allow the interest to accumulate and you will get interest on the interest – what is known as compound interest or you will be able to spend it. Most banks and building societies will offer this sort of account and many people will get one with the same company as their current account so that they can more easily transfer the money when they need it.
Premium bonds are offer by NS&I and they are special type of account. You do not accumulate interest but the money you put in is used to buy £1 bonds. Each is entered in a monthly draw and you have a chance of winning a cash prize which will either be put into your bond account, sent to you by cheque or put into a nominated bank account. These can be a great replacement for lottery tickets as you are able to get your money out when you need it and so you do not lose the money that you have entered in the draw. The odds of winning are far higher if you have more money in the account though as you have more bonds to enter into the draw. However, some people do still win with smaller amounts but it is rare. It can be a fun way to save money though and if you like to take a risk or to gamble then it can be ideal for you.
These bonds will pay you interest into a nominated account each month. They are designed for you to put a lump sum of money into and they will then pay you the regular interest which will act as income for you. This Can be really useful if you want to top up your income or are relying on income like this rather than earnings, perhaps because you are retired. If they are instant access the interest is still fairly low, but the interest can still be pretty good compared to other instant access savings accounts, so it is worth having a look and thinking about whether it will suit you.
This is a just a sample of the types of accounts that are available and it is a good idea to find out about what your options are so you can choose the most appropriate one for your specific needs. Also stay open minded and aware of the interest rates as they will vary with time and you may wish to switch accounts from time to time to get more money.