If you put a little bit of money away regularly you will be surprised how it all adds up. You could be putting money aside for something special like a new dress, summer holiday spending money or just for a rainy day, whatever the reason it is a good habit to get into. And the earlier you start saving, the more money you will have to achieve your goals.
Saving a little and often it will hopefully mean you can get all the things you want and will have money if something happens unexpectedly, this could be your bike breaking down or being asked to go on a holiday.
The good habits you learn through saving should hopefully help you to avoid debt and help you manage your money successfully.
Saving for a rainy day is always a good idea, if you can afford it. You don't have to save a lot each month, but if you are planning on saving it's worth opening a separate savings account. You'll get a higher rate of interest and you won't have to worry about accidentally spending your savings.
A Savings Account differs from a Current Account in that it lets you earn some extra cash, called interest, while your money is lying around in the account. The longer the money is in the account and the more you save, the more interest you’ll earn.
However, savings accounts don't mean you can never touch your money again - most will allow you fairly easy access to your money if you need it. When you open the account, make sure to check what the terms are: some accounts can require 90 days notice, while some will limit the number of withdrawals you can make each month.
The main types of saving products are:
Some savings accounts will have age restrictions so make sure you ask about this when you’re choosing your account. Shop around, speak to other people, and get as much information as possible to find out what's best for you.
Savings Accounts can give you all or some of the following services:
If something goes wrong with your bank, the government will guarantee your savings up to £50,000, so you don't need to worry about losing them. If you are lucky enough to have more than £50,000 in your savings, it's best to split it up into different accounts with no more than £50,000 in each.
Adding up to a lifetime provide easy to understand and interactive information on a whole range of different financial things you'll have to deal with in life. Check out their section on savings for more information.
Money Advice Service - Want to make the most of your money? Take part in a free confidential financial health check from the Money Advice Service. Just answer some straightforward questions about you and your money and the health check will set out what you can do in easy steps.
Published on 10/05/2011
Last modified on 24/01/2012
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