Types of savings accounts

[bea (Beatrice Borbon)]

In today’s blog post we take a look at different kinds of savings accounts, from bonds to ISAs!

Choosing between different types of savings accounts

[Ordog]

If you have a Monzo savings pot, is that technically a savings account since it is with a 3rd party? or is Monzo themselves now a savings account? If so which type would it fall under?

Savings bonds – good if you:

• Don’t need to use the money for six months or more
• Have £1,000 or more in savings (although this isn’t always a must)
• Want a high interest rate

Regular savings accounts – good if you:

• Can reliably set aside money each month (You’ll have to pay in money every month. This usually continues until the account’s term ends (e.g. after a year or two). Payments tend to be anywhere between £10 and £500, depending on the agreement)
• Don’t mind having limited access to your savings for a while
• Want a high interest rate

ISAs – good if you:

• Want to avoid getting taxed on interest you’ll earn above the Personal Savings Allowance
• Want to invest while protecting interest, profits and dividends from tax (only stocks and shares ISAs)

Instant access savings accounts – good if you:

• Don’t have lots of money to open an account with
• Aren’t sure how much you can save each month
• Prefer to access your money anytime rather than get a higher rate

[Rat_au_van (Em)]

Instant access savings as there’s no notice period or regular payment

[Ordog]

There is a typo in the article too…

Under the heading " Instant access savings accounts" the bulleted list is titled “Regular savings accounts – good if you”

[Ordog]

@Rat_au_van

Instant access savings as there’s no notice period or regular payment

But it isn’t instant access? or is up to 24 hours classed as instant in banking?

Also, not to be pedantic but Monzo also require a minimum of £1,000 so “Don’t have lots of money to open an account with” wouldn’t apply here either.

Why is banking so complicated

[anon65126452]

I used to work in Retail Banking until I was made redundant last summer. The best savings accounts for most financial institutions are Fixed rate bonds. The benefit is for both the customer and Monzo. The customer has a fixed return and Monzo have funds to use on investment of its future. When priced correctly word of mouth soon spreads.