There are 1000's of savings accounts available from the banks, building societies and financial providers in the UK in 2011 so what should you be looking for
to get the best savings account? The first thing to consider
is whether they are covered under the UK financial services compensation scheme as after the Icelandic banks collapsing it
is probably better to be safe than sorry. Most savings accounts will be but there are exceptions like the savings accounts
from the post office which are covered under the Irish scheme and ING which is covered under the Dutch scheme. Remember
the UK scheme only guarantees an individuals savings account up to £85,000 so if your savings are worth more than
this you might want to consider spitting your savings between different savings account providers.
The next consideration is how quickly you will need access to your savings as the
best savings accounts offering the highest interest rates to savers will normally require you to lock your savings away for
a period of time. Instant access savings accounts will give you immediate access but the interest rates on offer to savers
are normally quite poor, the next step up from these savings accounts are notice accounts which will require you
to give notice to gain access to your savings and are often 30, 60 or 90 days notice and although they normally pay a
higher rate of interest than instant access savings accounts they are generally not the highest paying and best savings accounts. The
highest interest rates for savers normally comes from fixed rate bonds where in order to get the higher interest rates you
are required to lock your money away for a term. These terms can be as short as 6 months or as long as 5 years with the one
year fixed rate bonds often the most popular for savers. If you are sure the funds will not be required in the short term
these fixed rate bonds are often a great choice for savers looking to get the highest interest rates.
Currently some of the best fixed rate bonds are being offered by ICICI Bank UK who offer 6,12,24,35,46 and 60
month terms and also by Birmingham Midshires. They are both covered under the UK financial services compensation scheme and the minimum investment is £1,000
with ICICI and £1 with BM if you have a flex account. With UK interest rates forecast to stay low over the
next 12 months these are our preferred savings accounts. If
you are after an instant access savings account Principality Building Society regularly offer good rates to savers on their esaver savings account. Finally remember that each year you have an ISA allowance and the money you invest in your ISA is tax free so you
should look to utilise this allowance each year in the cash component and for the more adventuorous the stocks and shares
component.
On the stocks and shares component Virgin offers a climate change ISA with a minimum
investment of only £500 and details can be found on the virgin website
