Skip to main content

How to set up a Savings Account

1. Bills 2. How to pay your bills 3. How to set up a bank account
4. How to set up a savings account 5. Borrowing money 6. Credit score
7. How to budget and save 8. Education financial support 9. What to do if you're in trouble
10. Financial abuse  

4. How Do I Open a Savings Account?

When opening a savings account, you need to think about whether you will need access to your money, how long you want to save for, and what is the best way to manage your accounts.

 There are different types of savings accounts:

  • Instant access —Allows you to add money and take money out when you want
  • Notice account — Just like instant access, it allows you to add money when you want but you have to give notice to withdraw money, for example 60 days, or pay a penalty
  • Regular saver — You will have to save a set amount each month, for example, £100 every month.  This type of account is great if you do not have a lump sum to save
  • Fixed bond — Keeps the money 'locked away' for a set time, for example a year.  Fixed bond accounts have a fixed rate of interest for the whole time.

You do not need to have a savings account to save money.   You can save money using your current account but you should consider if:

  • The interest rate — Some current accounts have very low or no interest rate at all, compared to savings account
  • Will be able to spend money more easily and not save as you planned.

Most savings accounts can be opened by going to your local bank, online or through the post.  It is best to check what is best for you and the bank. 

If you are under the age of 16, you can open a Junior ISA account.

When opening a savings account you will need:

  • Proof of identity, e.g. driving licence, passport
  • Proof of address, e.g. bank statement, official letter, council tax bill
  • To be over the age of 16 to set it up yourself or with a parent/guardian if under 16.

 ISAs 

Some savings accounts are also known as Independent Savings Accounts (ISA). There are different types:

  • Cash ISA — savings through a bank or building society account
  • Stocks and shares ISA — shares in companies, unit trusts and investment
  • Innovative finance ISA — peer-to-peer loans (loans that you are able to give to other people or businesses without using a bank)
  • Lifetime ISA — cash, stocks and shares.

A cash ISA can be bought at your bank or building society, and stocks and shares ISA,  can be bought from an independent financial adviser, a financial broker, or fund supermarkets.

Cash ISAs normally have a higher interest rate than a regular account but some savings accounts have a better interest than an ISA account.  The main difference between a savings account and an ISA is that ISAs are tax free.  If you are considering opening an ISA account, please be aware you may have to give a notice period to withdraw your money.


< Previous

Next >

How to set up a bank account
Borrowing money
Back to top