The potential fall-out from the credit crisis has prompted many UK savers to increase their personal savings balances and also to reduce the amount that they withdraw in order to protect themselves from any unexpected adverse changes in their financial circumstances.
This precautionary measure is not only providing some comfort for those worried about a possible downturn in the economy, it is also helping to boost the short-term liquidity of the UK’s financial organisations.
In addition to existing account holders many would-be savers are also seeking new accounts in which to deposit funds for a possible rainy day, and due to the amount of different accounts on the market they need to work out which is the best for their needs. Some investors may be able to afford to deposit their funds in notice accounts whereas others investors require instant access to their cash, but whatever their requirements there are a few simple things that can be done in order to ensure they get the best deals on the market.
Before looking anywhere else potential savers should first check with banks and building societies at which they already hold accounts as better deals are often offered to existing customers as a way of rewarding loyalty.
In addition to where potential savers look for the best accounts they should also be aware that some types of account will have a higher headline interest rate than others. Savings accounts that offer the best interest rates tend to have a minimum opening amount which must be put into the account, and it may have to be closed if at any point the account balance falls below that sum; this type of account is suitable for savers that can leave a large amount of cash untouched.
Other accounts offer additional interest incentives for not making withdrawals within a specified time period, say six months or a year. However, because that added interest is merely a bonus and not a requirement of the account then should the worst happen and the account holder wishes to make a withdrawal, then they still can. Rather than invoke a penalty as they would on a notice account the holder loses their bonus interest for that qualifying period.
In addition to opening special accounts some people opt to use an interest-bearing current account for their day to day savings as they can offer comparable rates and the same benefit of instant access, while it doesn’t require them to open a dedicated account.
But, whatever type of account is being used, UK savings balances are on the way up, for now.
Disclaimer:
This article has been written for information and interest purposes only. The information contained within this article is the opinion of the author only, and should not be construed as advice or used to make financial decisions. Expert financial advice should always be sought and any links contained within this article are included for information purposes only.
