Comparison makes sense

The best way for you to save depends on your individual circumstances and the reason for which you are saving. Before you decide to give your money to a bank or building society make sure you understand the risk involved. Decide in advance the amount you are capable of saving, and for how long you are willing to keep it away. Before comparing rates and providers, make sure that type of savings account you choose meets your needs. Review your financial conditions and ask yourself if you want to have direct access to your money or if you feel secure enough to tie it up for a higher return. Also, think about which type of transactions (internet, phone, cash-card, direct post, branch) will fit with your daily life.
·        Compare the different accounts and providers available in the market. Be aware that some of the rates quoted include a  bonus that does not apply to everyone.
·        Don’t disregard the costs involved. Choosing an account that offers a cash card might mean extra costs for acquiring the card and using various ATMs. Furthermore, be aware of the penalties involved in early or frequent withdrawals.
·        Ask yourself whether you will be able to meet any required deposits and avoid withdrawals.
·        Consider your risk adversity. A variable rate will change in line with the Bank of England’s base rate. A fixed rate provides safety, but ignores inflation and changes in the base rate.  
After deciding which account suits you better, the final choice must be the best interest rate. Although people pay taxes on the interest earned, rates are usually quoted gross (without tax). As long as you have over ₤250 deposited in your account, the bank must inform you, if the interest rate falls more than 0.5 per cent relative to the Bank of England’s base rate. Reforms in the Credit Consumers Act oblige financial institutions to keep consumers up to date. Nevertheless, check your rate regularly, and make sure that you are getting a good return on your money.