Types of savings

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Help to Buy ISA or Lifetime ISA?

If you’re looking to make the most of your savings, you’re probably interested in getting a Lifetime ISA, or a Help to Buy ISA. If you manage your finances well, both can prove a great way to make your money stretch further, but which is best for you? In this guide, we break down the pros and cons and look at different scenarios.

Child Trust Funds

Child Trust Funds (CTF) were introduced in 2002 to encourage saving for children. Though they’ve since been replaced by Junior ISAs, those with existing accounts or vouchers get to keep their Child Trust Funds. Here’s more on how they work and information on how to transfer an account.

Index-linked savings accounts

Index-linked savings accounts are fixed-term deposits. You agree to leave your money in the account for a certain number of years. In exchange, you’ll get an interest rate that’s linked to inflation.

Cash savings at a glance

Choosing between savings options is easier than it looks. There are hundreds of accounts, but only a few types of account – some for easy access to emergency funds, some for saving regularly and some for growing your money. Take a look at the table to see which suits you best..

Rotating Savings and Credit Associations

Rotating Savings and Credit Associations are collective schemes which allow friends to save together and have been popular in the Caribbean for many years. Often called pardner, pardna or paadna schemes, they are not regulated in the way banks and formal lenders are, but those who use them say they encourage savings and allow people without bank accounts access to credit.

Junior ISAs

By starting to save early, you can put your children on the path to a solid financial future. Junior ISAs – launched in November 2011 – let you save and invest on behalf of a child under 18. And with no tax on the earnings, the money you put away can grow even faster.

Saving for your children

Saving for a child today is a wonderful gift for their future. Not only can they start their adult lives with some savings in hand, but getting kids involved early with saving also helps them learn important lessons about money. Here are some products that can help you start saving for children.

Sharia-compliant savings

Sharia-compliant accounts provide the same day-to-day banking services as mainstream current accounts. However, they don’t give you a return on your money or offer overdraft facilities as the principle of paying or charging interest is against Islamic law. Any money invested will be kept separate from other bank accounts – it won’t be used to generate interest or be invested in prohibited businesses.

Credit union savings accounts

In credit unions members pool their savings and lend to one another. Members have something in common, such as the same employer, trade union, attending a specific place of worship or living in the same area. Credit unions use the money they earn to improve services and reward their members.

National Savings & Investments (NS&I)

National Savings and Investments (NS&I) offer a wide range of savings and investment products that are backed by HM Treasury. Some are not always available, or are limited offers – keep an eye out for good deals.

Premium Bonds

First introduced in 1956, Premium Bonds are now owned by around 23 million people in the UK. Here you can find out what Premium Bonds are, when they might be a good investment and how to go about buying and selling them.

Regular savings accounts

With a regular savings account, you commit to paying in a certain amount each month. In return, the bank or building society gives you a higher interest rate than you’d get with their current account or ordinary savings account.

Saving for Christmas

It’s a good idea to save ahead for Christmas. Dedicated Christmas savings schemes can help you to avoid dipping into your cash too early and make sure you have enough money up-front to pay for gifts, food and drink. But there are other ways to save too. Read our guide to the best ways to avoid New Year financial hangovers.

Savings Bonds

Savings Bonds are interest paying deposit products offered by banks and building societies and occasionally National Savings and Investments (NS&I) for a set term. A bond of this type is really a fixed term loan from you to the provider (the bond issuer) usually in return for a higher interest rate than you may get from traditional deposit accounts.

Instant access savings accounts

These are accounts that pay interest and allow you to withdraw money whenever you need it. You can save as little or as much as you want each month. You can often open an account with an initial deposit of as little as £1.

School fee plan

School fee plans are designed to help parents and guardians pay school fees. They often come with some measure of protection for your investment and can be tailored to your individual circumstances and needs.

Cash ISAs

Cash ISAs (sometimes called NISAs) are savings accounts that pay interest that is free of income tax.

Compensation if your bank or building society goes bust

If your bank, building society or credit union went bust you would be entitled to compensation through the Financial Services Compensation Scheme for a maximum of £85,000. Find out what happens for joint accounts and if you have money with two banks in the same banking group.

Help to Buy ISA FAQ

Help to Buy ISAs are a tempting proposition for first time buyers, but how do they work? We’ve pulled together some of the most common questions, including who can get one and how much you can save.

Lifetime ISAs – how they work

Lifetime ISAs (also known as LISAs) are a new type of ISA created to help people save for their first home or retirement. If you take out a Lifetime ISA, the Government will give you a bonus worth 25% of what you pay in, up to a set limit, every tax year. This guide will help you understand whether taking out a Lifetime ISA is the best option for you.

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