Savings accounts Posted 8/23/2007 7:54:15 AM A decent interest rate As a rule of thumb, if a bank's Savings Account isn't paying at least the Bank of England base rate then sign up with someone else because there is plenty of choice. The best rates tend to be for accounts operated either over the internet or by post as this saves the provider administration costs. Also, if you are aged 50 or above make sure you are getting the slightly enhanced rates often available for "silver savers". Having opened an account, it pays to monitor the interest rate periodically as some banks offer a great introductory deal but don't then keep up with competitors as the base rate rises. Also watch out for hidden interest penalties for making multiple withdrawals - even on an instant access account, some providers will dock that month's interest for example. Flexibility The point about saving is easy access - why set up an emergency fund that you can't access for say three months? Although you may (though this is by no means guaranteed) get a little more interest on a notice account or a fixed term deposit there are often penalties for making withdrawals and we think the extra flexibility of being able to get to your money immediately, with a "no notice" account, more than compensates. The other problem with fixed rate accounts is that if interest rates rise while your money is locked away you won't be able to take advantage. (2) Comments

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