What type of savings account do I need?

What is the  best savings account for you? The answer to this question might seem hard to find, especially with there being so many options available. However, by exploring the types of accounts and the key considerations, you should be able to find the ideal account for your needs.

Types of savings accounts

There are a number of savings accounts to choose from, each with distinct features, advantages and disadvantages. Compare savings accounts to find the right one for you.

Regular savings account

With a regular savings account, you’re required to put away money on a monthly basis. These accounts are ideal if you’re looking to save a portion of your wages each month. Depending on the lender you choose, regular savings accounts usually have a minimum and maximum monthly deposit, encouraging you to save little and often.

Easy access account

An easy access account, otherwise known as an instant access savings account, allows you to withdraw money at any time. This type of account comes with the benefit of unrestricted access to funds, making them suitable for short-term goals and emergency funds. However, these accounts typically offer lower interest rates and are not considered the best option for long-term savings goals.

Fixed rate bond

With a fixed rate account, you can put your money away for a set period with a fixed interest rate. It's important to note that you cannot access your funds during this period. However, fixed rate accounts tend to offer comparably higher interest rates. Generally, the longer you commit to the fixed term, the higher the interest rate you can expect to earn

Cash ISA

A cash ISA is a form of tax free savings account. This means that you won't pay any income tax on the interest you earn, as long as you don't deposit more than the allowance. For example, customers can deposit up to £20,000 a year, completely tax free. However, with Hodge you must deposit a minimum of £1,000 within 14 days of opening the account.

Lifetime ISA

A lifetime ISA is a specialised savings account, designed to help you purchase your first home or save for retirement. The government will add a 25% bonus to your savings, up to a maximum of £1,000 a year. However, these savings accounts have specific eligibility requirements. For example, you must be over 18 but under 40 to open an account.

Choosing the right savings account

Find an account that aligns with your financial goals. Answer the following questions to ensure you make the right decision. 

Do you want quick access to your savings?

If you answered "yes", then an instant access account could be the right option. With this type of account, you can access your money when you need it most.

If you answered "no", then a fixed rate bond could be the right option. With our fixed rate bonds, you can put away your money for up to five years.

Do you want to save a regular amount?

If you answered "yes", then a regular saver could be the right option. With this type of account, some lenders allow you to deposit up to £500 a month.

If you answered "no", then a cash ISA could be the right option. With cash ISAs, you can earn tax free interest on your savings.

Do you want to deposit a lump sum?

If you answered "yes", then a fixed rate bond could be the right option. With fixed term accounts, you can access higher interest rates than you could with other savings accounts.

If you answered "no", then an instant access account could be the right option. With the majority of instant access savings accounts, you need to make a minimum deposit of £1 to set up your account.

Do you want to buy a home?

If you answered "yes", then a lifetime ISA could be the right option. With this type of ISA, the government will add a 25% bonus to your savings.

If you answered "no", then a cash ISA could be the right option. With this form of bank account, you can deposit up to £20,000 a year, without paying tax.

Explore our savings accounts

Once you have found the right type of savings account for you, take a look at our products. All our savings accounts have been carefully designed, with competitive rates and convenient features. Make the most of your savings with Hodge.

Explore our savings accounts or contact us.

This article is correct at time of publishing and for general information purposes only. We recommend you speak to a professional financial adviser for advice. You can find a financial adviser and further personal finance information at unbiased.co.uk.