5 top tips for opening your first savings account

Congratulations on securing employment, the days of beans on toast and re-wearing socks are over! Now that you have steady income, it’s time to start thinking about where you’re going to store all of that cash.

The going advice for young people with salaries is to spend money on experiences rather than stuff. You’ve got the rest of your life to buy decor but you’re only young once.

That said, there’s no better feeling than having a nest-egg account for a rainy day. With these top tips for opening a savings account, you can secure the future and stop worrying about the present.

1. Know how much you’re aiming for

Most savings accounts come with a minimum initial investment of £1 but can extend as far as £100,000. You obviously won’t need to worry about the latter but if you have an idea of how much you want to save, it’s better looking for accounts with larger initial investments limits. The more you put in, the more you’ll get back in interest.

2. Is a fixed rate account for you?

If you’ve got this far, we’re hoping you understand how interest basically works. A fixed rate account typically lasts a year and is perfect for locking away a sum of money without worrying about the fluctuating market. The catch is that you cannot make withdrawals at will but there’s nothing to say that you can’t open a fixed rate account as well as an accessible savings account.

3. A notice account might be better

If you want a better interest rate but want to access your account periodically, a notice account is for you. This account requires a notice period for any withdrawals. In recent years the advantage of a better interest than an instant access has lessened so a notice account serves the purpose of discouraging impulsive withdrawals.

4. It’s a (bonus) trap!

You’ve got to watch your back when it comes to shifting money about. Some interest rates come with bonuses that have unexpected expiry rates. Keep your eyes on these and shift your money as soon as they end to get the most out your interest.

5. Easy-peasy access

Preferred by the recently employed, an instant (or easy) access account has a lower return but allows for, you guessed it, instant access. Some accounts have limited withdrawals so be sure to read the small print but most these days allow for freedom of funds. Happy banking!

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