Opening a savings account: 5 things you need to know

If you’re trying to save each month, but not making much progress in your current account, then you’ll probably be much better off opening a savings account. Transferring some of your salary each month into a savings account is an easy way to accumulate some money, alongside from your day-to-day spending. Here are a few things you need to look out for when you come to choose the right savings account for you.

What you need to take to the bank

If you plan to open a new savings account at the bank it’s worth preparing all of the paperwork you’re going to need to take along with you. It’s likely these documents are scattered throughout the house so will need accumulating first. For most banks, you will need to take in your previous account statements, a letter with the proof of your address and some form of proof of identification such as your passport or driving licence.

Interest Rates

Savings accounts are a safe place to keep your money, while offering a bit more than your average current account. Look for the best interest rates across price comparison sites and use your new savings account to put aside at least £10 each month out of your pay cheque. Before you know it, you’ll have accumulated a decent amount of savings that can be put towards something special or kept for an emergency situation.

How much you can withdraw each month

Some savings accounts have limits on them, which can be a good thing, but could also get you into trouble should you need cash instantly. Make sure you choose a savings account that works for you and your individual circumstances.

Fees

Bank accounts are usually free, but you will always be offered an upgrade for your account that usually comes at a price. Maintenance fees, insurance cover and overdraft fees are all unnecessary extras to pay for. Look for accounts that are free, and still give you plenty of benefits. It’s unlikely a savings account will require any upfront costs or monthly charges but it’s still something to bear in mind.

Online Banking

It’s likely you’ll want to be able to use your savings account from your mobile banking app, so before you sign up to anything, make sure that this is possible. It’s even better if you can transfer from your savings account across to your current account at no extra cost, should you need to.  

Finally, it’s worth being tax-wise when it comes to your savings account. If you pay income tax, you can earn interest tax-free with a cash ISA but always make sure that the tax benefit isn’t cancelled out by lower returns on your money.

With these tips you can now go out and find the perfect account for you – happy saving!

Featured image by Images Money

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