How to choose the right savings account?

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How to choose the right savings account?
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Every decision brings with it some good, some
bad, some lessons, and some luck. The only thing
thats for sure is that indecision steals many
years from many people who wind up wishing theyd
just had the courage to leap. Doe
Zantamata Life revolves around making decisions
about every aspect of life, from what food to
eat, where to go on holiday, where to study, what
career to pursue, and other decisions such as
financial decisions. Deciding on the best saving
account to open, based on your saving needs, is
yet another decision that many make. According to
the Bank of Englands findings, approximately
more than 200bn was deposited into saving
accounts since 2020s lockdowns. However, the cost
of living has become more expensive through the
rise in inflation, which can have a detrimental
effect on several different aspects of life, such
as an increase in rent, food, transport, and how
much interest you make in your savings. For
instance, an increase in inflation has a negative
effect on interest rates, as money will decrease
in value when you withdraw compared to when you
first deposited the money into the account.
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What is Inflation? The rate of inflation has
increased over the years, inflation is when money
decreases in value. The inflation rate is
determined through the increase and decrease of
prices and is tracked through numerous indices.
Banks use the consumer prices index (CPI) to
document the cost of various items such as food,
transport, and entertainment. In October 2021,
inflation increased to 4.2, whereas this was
3.1 the previous month, according to Office for
National Statistics (ONS). The interest rate on
savings should not be less than the inflation
rate otherwise, your money is not getting the
best value for money. If you are getting a higher
interest rate that is more than the inflation
rate, then investing your money into a saving
account is likely to be worthwhile investment.
Fixed-rate bonds typically have the best interest
rates, but they can have a downside as they have
restrictions on withdrawals or extra payments.
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In 2020 it was found that 6.50 of people in the
UK have no savings this could be due to not
being well informed on the best banking account
for their saving needs. The decision of which
saving account to choose based on your needs is
entirely up to you, but it is essential to be
well informed before taking the plunge. So below
is some more information on what to consider when
choosing the right saving account for your saving
requirements. What saving goals do you currently
have? First, you need to establish what your
saving goals are? If you are saving for a
short-term goal such as a holiday or new
bathroom, easy access accounts are ideal for this
saving need as you will not be penalised for
withdrawing from this account. If your goal is a
long-term goal, a fixed-term goal may be better.
Whereas a regular savings account will be ideal
for saving on a more regular basis as you must
deposit money every month but give some of the
best interest rates.
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How often do you intend to access the
account? Before opening a savings account, it is
essential to consider how likely you are to
withdraw money because most saving accounts have
rules around accessing the account, and some are
stricter than others. Usually, the more stringent
the rules of an account, the better the interest
rate you will get on your savings. Although easy
access accounts are the most flexible accounts as
you can withdraw as often as you need without
being penalised, they have lower interest rates
than other saving accounts, such as fixed-rate
saving accounts. A fixed-rate account will mean
you have to keep your funds stored away for a
specific time which is great for those with
long-term saving goals.
Are you required to deposit a specific amount
each month? Some saving accounts/ building
societies may require you to deposit a specific
amount to open an account each month for
instance, most regular saving accounts and most
other providers require savers to deposit a
minimum of 25 per month
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Do saving accounts require you to pay tax? In
most cases, savers do not pay tax for their
savings if they earn less than 1,000 in interest
and are basic taxpayers. However, taxpayers who
pay a higher rate have a threshold of 500, and
anyone who has a 45 rate of income tax is not
entitled to an allowance. Over 80 of taxpayers
currently pay tax at the introductory rate in the
UK, whilst 13 pay a higher tax rate. Cash ISA is
one option that higher taxpayers or those with no
allowance could opt for as you dont pay tax on
Cash ISA. What is Personal savings
allowance? Personal savings allowance works by
banks or building society paying all interest
gross without charging tax, which means that you
can sit back and relax if your collective income
from your savings is under your personal
allowance. Prior to this system being put in
place the old system would have involved the bank
or financial institute automatically deducting
20 from any savings interest.
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How would the saving interest be paid? The
interest on savings can be paid into your account
annually, quarterly, monthly or on a agreed date.
The interest could be compounded or paid away
in your account the interest has to be paid into
another account if your savings are paid away.
However, your account balance is included when
interest is not paid away. Compounded interest is
when interest is added again in the future this
interest is added to your original balance, along
with your first interest payment. What does AER
Stand for? AER stands for annual equivalent
rate, which compares saving accounts. AER
presumes that you maintain your funds in a
specific account for a year while also
considering other factors that give a more
precise overview than the gross rate.
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What are the risks associated with a saving
account? Generally, saving accounts with
established banks and building societies are
usually considered low risk. The financial
services compensation scheme usually protects
savings of up to 85,000. However, sometimes
returns can be minimal for those who are less
hesitant to take risks, there are other types of
investments involving more risk, such as stocks
and shares, which could also increase or decrease
in value. Are there any saving apps that can
track my saving accounts? Intellisaving is the
best app for finance management as the platform
is ideal for integrating and tracking multiple
saving and interest-bearing accounts within one
single platform. The Intellisaving smart saving
account application is also home to many features
that make every users saving journey run
smoothly. Every user has a personalised portfolio
with their financial summary that includes
balances and returns, a comparison feature that
shows the highest interest rates across each
saving category (e.g. Regular saving account) at
present, a watchlist to add saving accounts that
have sparked your curiosity.
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This app for saving enables users to manage their
finances more strategically. Different decisions
can shape our lives in different ways, some
change our lives for the better, and some teach
us lessons about what paths to avoid in future.
Choosing what saving account is right for you is
an important decision like many decisions we must
make in life, as saving now could be your key to
a more stable financial future. As Tony Robben
says, It is in your moments of decision that
your destiny is shaped.
Current advice on choosing the right saving
account shows that there are many factors to
consider before selecting a saving account that
best matches your saving needs, with inflation
and interest rate being among the most
significant factors to consider when opening an
account as these could decrease the buying
potential of your money. There is a range of
saving accounts for different saving needs, which
means that most savers are likely to find a
saving account that is the right fit for them
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Once you have chosen your saving account, you can
integrate the account to Intellisaving to
facilitate your saving path through our catalogue
of features lessening the weight upon your
shoulders. If you choose an account that is not
ideal for you, dont worry as no matter how
stringent the rules a bank of financial institute
imposes on a saving account, such as having to
invest in the account for at least a year, the
time will come where you will have another
chance, an opportunity to open another saving
account that is better suited to your
requirements.
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THANK YOU
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12827813)20-22 Wenlock Road, London,United
Kingdom, N1 7GU E-mail us at support_at_intellisavin
g.com For more visit https//www.intellisaving.co
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