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Types of savings accounts

Online savings accounts

These online savings accounts often offer competitive rates of interest "at call" in return for more restricted account access. Most are to be linked to an everyday transaction account.

Why choose this type of account?

Someone may choose this account if they want to make the most of their spare cash and earn interest on it while deciding how to use it. Interest rates are variable and can include an introductory bonus rate. It's important to check all the interest rate details and any fees and other conditions (including deposit conditions) when applying for these.

Bonus interest accounts

Some savings accounts offer bonus interest as an incentive not to touch your cash, provided you meet certain requirements, like depositing a minimum amount or not making any withdrawals over a set period.

Why choose this type of account?

A bonus interest account could be a good place to save for a financial goal such as saving for a holiday or first home deposit, particularly if the interest rate incentives to save are attractive.

Term deposits

With a term deposit a lump sum of money is deposited for a selected term at a fixed interest rate. The amount of money deposited along with the term selected, the interest rate and how the interest is to be paid (annually, monthly or at the end of term) will determine the amount of interest earned.

Why choose this type of account?

A term deposit provides certainty of knowing exactly what interest will be paid on the deposit, provided the deposit conditions are met.

 

Things you should know

This information is general advice only and does not constitute any recommendation or personal advice. It is current at the time of publication (2 September 2015), and is subject to change. It has been prepared without taking account of your objectives, financial situation or needs. Because of this you should, before acting on the information, consider its appropriateness, having regard to your objectives, financial situation and needs. Consider obtaining personalised advice from a professional financial adviser and your accountant before making any financial decisions in relation to the matters discussed in this document.