Use this guide if your savings sit in a current account or an old account earning little interest. Have a rough idea of how much you want to save, when you may need it and details of your existing accounts ready.
Step by step
Decide when you need the money
Split your savings by purpose: emergency money you may need at any time, and money for later goals such as a holiday or deposit. This decides how much access you need. Write down each goal with a rough date.
Understand the main account types
Easy access accounts let you withdraw any time. Notice accounts need you to give notice before withdrawing, and fixed-rate bonds lock money away for a set time, usually for a higher rate. Regular savers pay interest on monthly deposits up to a limit.
Consider an ISA
Interest earned in a cash ISA is tax-free, and you can pay in up to an annual allowance each tax year. Many people's interest is already covered by the Personal Savings Allowance, but an ISA can still help. Check the current ISA rules and allowances on GOV.UK.
Compare accounts properly
Compare the AER, which shows the yearly return, and read the conditions such as withdrawal limits or bonus rates that drop after a year. Check the account is with a UK-authorised bank or building society. Check that your money is protected by the Financial Services Compensation Scheme and note the current limit.
Open and move your money
Apply online or in branch and follow the identity checks. To move an existing ISA, use the new provider's transfer process rather than withdrawing the money yourself, or you may lose its tax-free status. Keep your old account open until the money has arrived.
Review regularly
Note when any bonus rate or fixed term ends and set a reminder. Rates change, so check every six months whether your account is still competitive. Move your money if a better option fits your needs.
Ready-to-use checklist
- Savings goals and dates written down
- Emergency money kept in easy access
- Account types understood
- ISA rules checked on GOV.UK
- AER and conditions compared
- FSCS protection checked
- ISA moved by transfer, not withdrawal
- Reminder set for bonus or term end
Practical tips
- If you have savings above the protection limit, consider spreading them across banks that do not share a banking licence.
- Be cautious of savings offers that promise returns far above normal rates; check the firm on the Financial Conduct Authority register.
- If you have expensive debt, it may make sense to pay that off before saving beyond an emergency fund; MoneyHelper can help you weigh this up.
Common problems
You need money from a fixed-rate account before the term ends.
Check the terms, as some accounts do not allow early withdrawals and others charge a penalty. Look at other sources first, and keep an easy-access emergency fund in future.
You took money out of an ISA and want to put it back.
Some flexible ISAs let you replace money in the same tax year without using more allowance. Ask your provider whether your ISA is flexible before you pay it back in.
Your interest rate dropped after the first year.
Many accounts have a bonus rate for a set time. Compare accounts and move your money, using an ISA transfer if it is in an ISA.
This guide gives general information, not personal legal, financial or medical advice. Rules and prices change, so check the current position with the official service before acting.
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