Where to find the best account
The High Street: If you live in or near a town where there are plenty of banks and building societies, then a branch-based savings account can be ideal. While these accounts do not always pay the best rates, you can at least meet face-to-face with someone who can help you choose the best home for your money. Building societies usually offer the best deals. Most societies plough all their profits back into high savings rates and low mortgage rates whereas banks have shareholders to consider. But it is still worth checking what the banks have to offer.
The post: Most banks and building societies offer postal accounts, which tend to have better rates because they are less expensive to run. Other financial firms also offer postal accounts. They are well worth considering but most will not allow you to make deposits in branches. Often you have to ring up or write in for account details. You post cheques off to make deposits, using pre-paid envelopes. You write to request withdrawals and a cheque should be sent off the same day the request is received.
The telephone: Many banks and building societies now allow you to run your account over the phone. You send off cheques to make deposits and withdrawals are typically posted out as cheques. A number of telephone accounts now issue you with a card to use at cash machines. These accounts can be very convenient, especially for elderly people or those living in remote spots. And even if you are easily able to get to the High Street, you may find it easier to conduct your business when it suits you. Rather than wasting your lunch hour standing in line behind someone depositing the week’s takings for a medium-sized business in pennies, you can just pick up the phone. These accounts often offer better rates of interest than branch-based accounts because the cost of running a call centre is cheaper than running a branch.
The internet: If you are familiar with the net then everything you need to manage your savings is available online. You can run your bank account and set up savings accounts with rival institutions. You can transfer money between the different accounts online to make sure that you are taking advantage of the best rates. You can check the standing of your finances 24 hours a day and make any necessary adjustments.
Many new internet ventures, including those from well-known names, offer high rates on their savings accounts. This is great – while it lasts. But you will need to keep an eye on the rates to ensure that you are still getting the best returns on your savings.
You may be worried about security. The internet is constantly under attack from hackers, but financial institutions claim that they use the latest high-security encryption techniques to ensure that your money is safe. See our special Advice Bank guide to internet banking.