Guide to savings

Thinking of saving or investing, but don’t know where to start? This guide provides an introduction to the various options available to you..

Before you choose a savings account, ask yourself:

  1. How often will you need to make withdrawals?
    Do you want instant access to your savings or would you be prepared to lock your money away for a fixed period of time? This could be anywhere between 30 days and three years. Usually the longer you have to wait before you can access your cash, the better the rate of interest you’ll receive.
  2. How do you want to manage your savings?
    Typically savings accounts that are managed exclusively online offer the highest interest rates as the savings made through reduced running costs can be passed onto you. We offer savings accounts that can be managed online and accounts that can be managed by phone, post or in our branches.
  3. How much do you want to save?
    We have savings accounts that you can open with as little as £1 or as much as £500. Some of our accounts allow you to save flexibly and regularly, others only allow you to deposit a lump sum upon account opening.
  4. Have you used your cash ISA allowance?
    Each tax year you’re given a tax-free cash Individual Savings Account (ISA) allowance from the government to encourage you to save.  All the interest is completely tax-free which means you keep all of the interest your savings earn. Because of this, a cash ISA is often a great place to start saving.

Which savings account is right for you?  

There are lots of different options when it comes to savings accounts, here are some of the most common ones:

Fixed rate bonds

These have a fixed interest rate over a set period of time. They often offer a high interest rate but you have to be confident you won’t need access to your money during the set time period.  Our fixed rate bonds are called Online Bond and Growth Bond.

Online Bond and Growth Bond are provided by Bank of Ireland UK.

Instant access and easy access savings accounts

Ideal if you want to put some emergency funds away for example, but also want to be able to withdraw your cash whenever you need it, without paying a penalty.  Our easy access savings account is called Online Saver whilst our instant access savings account is Instant Saver.

Online Saver and Instant Saver are provided by Bank of Ireland UK.

Regular savings accounts

With these accounts you have to commit to saving a regular amount each month for a year.  In return you’ll get either a fixed or variable rate of interest and you’ll be able to access your money should you need to.  We don’t currently offer these types of accounts but if you want to save regularly, try our Online Saver, Reward Saver and Instant Saver accounts.

Reward Saver is provided by Bank of Ireland UK.

Notice accounts

If you don’t need to make frequent withdrawals and can wait a fixed period of time before accessing your savings, a notice account could be right for you.  In return for slightly less access to your cash, you’ll get a higher rate of interest.  Our notice account is called Reward Saver.

Individual Savings Accounts (ISA)

You have two ISA options to choose from; a cash ISA and a stocks and shares ISA.

With a cash ISA you won’t pay tax on the interest you earn, so it’s a great place to start as you’re guaranteed returns on the money you put away. Cash ISAs are available as variable rate accounts or fixed rate accounts.

The interest rate on a variable rate cash ISA can go up and down over time whilst fixed rate cash ISA interest rates are guaranteed not to change for a fixed period.  Our fixed rate cash ISA is our Fixed Rate Cash ISA, whilst our variable rate cash ISA is our Premier Cash ISA. Our Fixed Rate and Premier Cash ISAs are provided by Family Investments.

Post Office ISAs are provided by Family Investments. Money in Post Office cash ISAs is deposited with Bank of Ireland UK.

With a stocks and shares ISA you won’t pay UK Income Tax or Capital Gains Tax on any gains you may make. But it’s important to remember you may also not get all your money back, as you’ll be investing in stocks and shares and the value of these can go up or down.

One final type of ISA is a Junior ISA. These are designed exclusively for children who didn’t qualify for a Child Trust Fund.  They are a long term investment which can only be accessed by the child when they reach 18.

Junior ISA is provided by Family Investments.

The tax advantages of ISAs depend on your individual circumstances and you should remember that the tax treatment may change in the future.

Definitions

ISA: An ISA is an Individual Savings Account. They are a tax-efficient way to save money as you pay no tax on the money you put into an ISA or the interest you earn. There are two types of ISA - cash ISAs with a fixed or a variable interest rate. And stocks and shares ISAs where your money is usually invested in stocks and shares. You can invest up to £15,000 between a cash ISA and a stocks and shares ISA this tax year (that's the period from 6th April to 5th April). You can only invest in one cash ISA and one stocks and shares ISA in each tax year.

Tax-free: Tax-free means the interest paid will be free from UK Income Tax and Capital Gains Tax. The tax advantages depend on your individual circumstances and the tax treatment of your ISA may change in the future.

Variable: A variable rate of interest can go up or down throughout the lifetime of a savings account.