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Step 1 - Choose the right savings account
The first step is to find the right account for you. Let's start at the beginning.
What's the difference between a savings account and a current account?
A savings account is somewhere to put money you'll use at some point in the future. Your savings will earn interest, which is money the bank or building society give you for keeping your money with them. Interest is usually paid every month or once a year.
A current account is a bank account designed to use every day. They’re often used for everyday spending and to pay bills. You can pay money in and out as often as you like, but you tend not to earn any interest.
A current account is a bank account designed to use every day. They’re often used for everyday spending and to pay bills. You can pay money in and out as often as you like, but you tend not to earn any interest.
What are the different types of savings accounts?
There are lots of accounts available, so let’s run through a few of the main ones:
Easy access accounts
These are your standard savings accounts. They're usually quite flexible so you can pay money in and take it out as often as you like. Some accounts may limit how often you can take money out. So always check the terms of the account you go for.
Cash ISAs
ISA stands for Individual Savings Account. We only offer cash ISAs but there are also stocks and shares ISAs, Lifetime ISAs and innovative finance ISAs.
These are tax-free savings accounts, which means you don’t pay income tax on the interest you earn. Each tax year you're given an annual ISA allowance. For the 2024/25 tax year, it's £20,000.
Cash ISAs can have fixed or variable interest rates.
Fixed rate cash ISAs:
These are tax-free savings accounts, which means you don’t pay income tax on the interest you earn. Each tax year you're given an annual ISA allowance. For the 2024/25 tax year, it's £20,000.
Cash ISAs can have fixed or variable interest rates.
Fixed rate cash ISAs:
You get a guaranteed interest rate, often higher than easy access accounts.
It's fixed for a set amount of time, usually between 1 and 5 years.
You usually cannot take money out or close your account before the ISA ends.
Variable rate cash ISAs:
Your interest rate can go up or down.
You can usually pay money in, take it out or close the account whenever you like. It’s best to always check the terms of the account you choose.
Regular savers
These are accounts to help you get into a savings habit and build up a lump sum. There's usually a limit on how much you can add each month and there might be a limit on how often you can take money out.
Fixed rate bonds
These are accounts for money you won't need to access for a while.
You get a guaranteed interest rate, often higher than easy access accounts.
It's fixed for a set amount of time, usually between 1 and 5 years.
You usually have a short amount of time to pay money into the account.
You usually cannot take money out or close your account before the bond ends.
How many savings accounts can I have?
You can have as many savings accounts as you like.
Saving for an emergency and want access to your cash at any time? An easy access account with unlimited access might work for you.
Looking to save a lump sum or build a savings habit? A regular saver might be the account for you.
You’ve already saved some money and won’t need to access it for a while? A fixed rate account might be right for you.
Want to save without paying income tax on your interest? An ISA might work for you.
Step 2 – Open your savings account
Exactly what you'll need to open a savings account depends on the provider and account you choose. But there are two things that most banks or building societies need to see:
Your proof of ID: for example, a current passport or driving licence.
Your proof of address: for example, a document which shows your current address, like a recent bank statement or utility bill.
If you're struggling to prove your identity or address, please do not worry. Get in touch with the provider to check how they can help.
Step 3 – Start saving
Set your goals
First things first, choose what you want to save for. Having an end goal in mind helps keep you focused and motivated.
It could be a short term goal, for example, saving a set amount before Christmas or some money for emergencies. And if it's a long term goal, like a house deposit, it's often easier to split this into shorter term goals. For example, aiming to save a certain amount each month or year towards it, so it's not overwhelming.
We can help you work out how long it will take to reach your goal and which of our accounts might work best for you.
It could be a short term goal, for example, saving a set amount before Christmas or some money for emergencies. And if it's a long term goal, like a house deposit, it's often easier to split this into shorter term goals. For example, aiming to save a certain amount each month or year towards it, so it's not overwhelming.
We can help you work out how long it will take to reach your goal and which of our accounts might work best for you.
Work out how much you can save each month
You can use our budget calculator to work out exactly how much money is coming in and going out. This lets you know how much you might be able to save.
Set up a standing order
It's a way to automatically send money from one account to another. It means you don't have to remember to move it each time. You'll also know how much you've got left to spend each week or month.
You might want to set it up for the day you get paid, to take away the temptation to spend it.
You might want to set it up for the day you get paid, to take away the temptation to spend it.
Need more help?
Looking for more information about our savings accounts?
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