Beginner's guide to savings accounts

Ten ways to stash your cash

1. Clear your debts first. There’s little point in having money in a bank or building society savings account earning 1% or less if you are paying 18.9% on credit card debt.

2. Saving is more successful if you have a goal to achieve. Use a calculator such as the one from financial services firm Hargreaves Lansdown here.

3. So what kind of savings account? Cash Isas have been the first step because they sheltered your income from tax. But now that you can earn £1,000 of interest on your savings before being taxed, you should consider other accounts too.

4. If you think you’ll need to get at your savings with little notice, go for an easy or instant access account. You won’t get a great rate, however.

5. New entrants to the savings market, such as challenger banks Atom or Aldermore, can offer better rates. Accounts operated over the internet also can provide a higher rate. But don’t forget small local building societies which can have good deals for those who live nearby.

6. You’ll get a better rate if you take out a regular savings account which means you have to put in a set amount a month (but you may not be able to get at your money in an emergency).

7. Look at fixed rates too. Locking away your money for a certain period of time can improve your deal but be aware if you want to get money out, there might be penalties.

8. Don’t ignore current accounts. Some pay better rates than savings accounts - although you might need to comply with conditions such as paying in at least a minimum amount each month. 

9. Check that your account is covered by the Financial Services Compensation Scheme - most are. This reimburses you if the bank goes bust, up to a limit of £85,000 for a single account or £170,000 for a joint account. If you’re really minted, you might want to think about spreading your money between several banks. Go to the FCSC website here to see a video on how it works.

10. DON’T put tonnes of money on deposit because interest rates are currently very low. The traditional advice is to keep at least three months’ pay or income readily available in case of ‘rainy days’. Consider saving into shares with any leftovers (see our guide to investment here).


More stuff:

  • For a guide to the ‘challenger banks’ go to
  • Look at comparison sites for good savings deals such as Which? here
  • Check out our tips for saving for kids here.


Last updated 9 March 2019.