4 steps to start saving

Building up even a small amount of savings can feel overwhelming at times - but it may not be as hard as you think. We're here to cut through the jargon, help you get started, and more importantly, stay motivated.

1. Learn the lingo

Getting to know the technical terms can help you decide which account works best for you. So here are some of the most common terms you'll see when looking at savings accounts.

 

Gross

Gross is the rate of interest paid before any tax (where applicable) has been deducted. 

 

AER

AER stands for Annual Equivalent Rate. This shows you what the rate would be if interest was paid and compounded each year. 

 

Compound interest

Compound interest means getting interest on money you save and any interest you’ve already earned.

 

Notice period 

With some savings accounts, you may need to give advance warning before you withdraw money. 

2. Have a target in mind

Keeping your eyes on the prize can help you stay focussed, as well as guiding you on how much to save each month, and for how long. 

3. Choose the right one for you

A savings account could be a good place to store your money as you’ll earn interest. There are lots of options out there, so finding the right account for you is really important.

Here are some of the key types of savings accounts. To compare all your options, you could also take a look at our savings comparison table.

Fixed rate accounts

  • the interest rate is set for a fixed period
  • good choice for medium-term saving (12 months or more)
  • interest rates are usually higher than instant access savings accounts
  • no partial withdrawals allowed, but this also means you’re not tempted to dip in
  • there may be a charge for closing the account early.

Instant access accounts

  • interest rates are variable so can go up or down
  • good choice for shorter-term saving when you might need to dip in
  • most allow you instant access
  • some higher rate accounts may have a withdrawal penalty.

Cash Individual Savings Account (ISAs)

  • a tax-efficient way to save money
  • make the most of your annual tax-free ISA allowance. For the current tax year, you can save up to £20,000 free from UK income and capital gains tax.

 

4. Get into a savings habit

They say it can take as little as 30 days for a new routine to become habit, so why not make your next one something rewarding and grow your savings?

 

Here’s an example of how to get started:

 

On payday, work out how much you need for essentials like mortgage or rent, household bills, food etc. Then try putting some of what’s left into savings, which will make it less tempting to spend. And if you’re comfortable with the amount, you could even set up a standing order from your current account, so the money’s transferred automatically each month.

 

You’ll be amazed how quickly you can build up a healthy-looking rainy day pot.

Get started

You can find more about our savings accounts using our savings comparison table. And if you have any other questions that aren’t covered there, chat to us on our App, message us via Online Banking, or give us a call anytime.