People often save for a specific reason and usually it's the safest way to build up a stack of money. It’s less risky than investing, but it offers limited growth. The most you'll earn on the money you save is the interest added.
Saving is perfect for people who don’t want to take any risks with their money and most savings accounts have easy access or are for a fixed term.
There are a number of different types of saving products out there. Here’s a rundown of what’s generally available to you:
|Type of saving||What is it?||How do I save?|
|Cash ISA||This is a tax-free savings account where the money you save is held as cash. The overall annual ISA allowance for the 2014/15 tax year is £15,000. You’re able to invest all of that allowance in a cash ISA, or split it between a cash ISA and a stocks and shares ISA as you wish.||A bank, building society, National Savings and Investments at the Post Office, some supermarkets and retailers, friendly societies, insurance companies, unit and investment trust companies, financial advisers, fund supermarkets and stockbrokers.|
|Short-term deposit account||An account that lets you get hold of your money when you need it. You’ll earn interest on the money in your account, but it doesn’t offer you any other potential for growth.||A bank, building society, National Savings and Investment accounts at the Post Office, financial services company or online provider.|
|Long-term deposit account||Similar to short-term deposit accounts, but you usually have to give lengthy notice that you want to withdraw some or all of your money. You’ll earn interest on the money in your account. The interest rate may well be higher than for short-term deposit accounts, but you don’t have any other growth potential.||A bank, building society, National Savings and Investment accounts at the Post Office, financial services company or online provider.|
|A savings bond or plan||This type of plan may offer you a fixed or variable rate of interest for a certain length of time. Often, you won’t be able to add to or withdraw from the plan until the end of the term you signed up for. You may receive a guarantee of the amount you’ll get back when the plan ends. You may receive a higher rate of interest.||A bank, building society, National Savings and Investment accounts at the Post Office, financial services company or online provider.|
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