Best Savings Accounts in the UK for 2024
TLDRThe video script focuses on guiding viewers on the best savings accounts for the year 2024, emphasizing the importance of having an easy access savings account for emergencies and essential expenses. It discusses various options including regular savers, fixed rate accounts, and Isas, highlighting the top picks for each category. The video also touches on ethical banking and premium bonds as alternative options for those who have reached their tax-free allowances.
Takeaways
- 🏦 Start the year by focusing on the types of savings accounts suitable for your financial goals.
- 💰 Prioritize an easy access savings account for emergency funds and essential expenses.
- 🔄 Consider notice accounts for a slightly better rate on your emergency savings if you can afford to tie up funds for a set period.
- 📈 For irregular income earners, aim for a larger emergency fund to cover lean periods.
- 🏠 Plan for both smaller and larger expected expenses, such as holidays or buying a home.
- 🎯 Aim to save three to six months' worth of essential expenses for emergencies.
- 🤔 Evaluate the best easy access account based on your specific needs and account features.
- 💡 Regular savers or monthly savers are ideal for consistently saving a fixed amount each month.
- 🔒 Once you've reached your tax-free allowance, consider using an ISA for tax-free interest earnings.
- 🎁 Lifetime ISAs offer a 25% bonus for first-time homebuyers under 40 and can be a valuable savings tool.
Q & A
What is the primary purpose of an easy access savings account?
-The primary purpose of an easy access savings account is to provide a safe and convenient place to store money that can be easily accessed in case of emergencies or unexpected expenses.
What are some situations where having emergency savings is crucial?
-Emergency savings are crucial in situations such as sudden medical expenses, loss of employment, or unexpected repairs to your home or vehicle.
How much money should ideally be saved in an emergency fund?
-Ideally, one should aim to save three to six months' worth of essential expenses in an emergency fund to cover costs such as rent, mortgage, bills, and groceries during times of financial hardship.
What is the recommended strategy for managing larger, planned expenses?
-For larger, planned expenses like buying a house or a wedding, it is recommended to save money in an accessible account and potentially consider notice accounts for a slightly better interest rate on a portion of the savings.
What is the Santander Edge saver account and what are its benefits?
-The Santander Edge saver is an easy access account that offers a high interest rate of 7% for the first year. It is beneficial for those looking to save a significant amount of money within a year and can be paired with the Santander Edge current account for added benefits.
What are the limitations of the Santander Edge saver account?
-The limitations of the Santander Edge saver account include the high-interest rate only being applicable for the first year and the maximum interest payable on the first £4,000 saved.
What is a regular or monthly saver account, and how does it help with saving habits?
-A regular or monthly saver account is designed to encourage consistent saving by requiring a set monthly deposit. These accounts often offer higher interest rates than easy access accounts, incentivizing regular saving habits.
What are the potential drawbacks of fixed rate regular savers?
-Fixed rate regular savers lock in the interest rate, which means if the base rate increases, the account holder will not benefit from the higher rates. Conversely, if the base rate decreases, the account holder is still guaranteed the fixed rate.
What is an ISA, and how does it provide tax benefits?
-An ISA (Individual Savings Account) is a tax-advantaged savings account in the UK. It allows individuals to save up to £20,000 per financial year without paying tax on the interest earned, making it an attractive option for tax-efficient saving.
What are the advantages of a stocks and shares ISA over a cash ISA?
-A stocks and shares ISA is advantageous over a cash ISA because it offers the potential for higher returns over the long term through investments in the stock market. Additionally, the annual allowance for capital gains from stocks and shares ISAs is higher than for cash ISAs, providing more tax benefits for those with larger savings or investments.
What is the lifetime ISA, and who is it suitable for?
-The lifetime ISA is suitable for those under 40 years old who plan to buy their first home worth less than £450,000. It offers a 25% government bonus on contributions up to £4,000 per year, which can be used towards the purchase of a first home or saved for retirement.
Outlines
📈 Introduction to Savings Accounts and Emergency Funds
The speaker begins by discussing the importance of being informed about the latest savings accounts and opportunities for higher interest rates. They emphasize the need for an easy access savings account as a fundamental part of one's financial strategy, primarily for emergency savings. The speaker suggests aiming for three to six months' worth of essential expenses in these accounts and highlights the significance of accessibility and the potential need for larger savings for those with irregular incomes. The focus is on the types of accounts that would be beneficial for individuals looking to refocus their finances or ensure they haven't missed out on any opportunities, particularly at the start of the year.
💰 Best Easy Access Accounts for 2024
The speaker discusses the best easy access accounts for the year 2024, with a particular focus on the Santander Edge saver, which offers a high interest rate of 7%. However, this rate is only for a year and is applicable only to the first £4,000 saved. The speaker also mentions the necessity of having a Santander Edge current account, which comes with a monthly fee. They provide alternatives such as Metro Bank, Ulster Bank, and other options for those who might not meet the specific conditions of the Santander Edge saver. The speaker also touches on ethical banking and the importance of choosing financial institutions that align with one's personal values.
🚰 Regular Savers and Monthly Savings Strategies
The speaker moves on to discuss regular or monthly savers, emphasizing their effectiveness in encouraging consistent saving habits and offering higher interest rates compared to easy access accounts. They clarify misconceptions about interest rates with regular savers and suggest that despite the potential for rate fluctuations, fixed rates can be advantageous in an anticipated climate of base rate cuts. The speaker highlights the Nationwide account as the highest paying savings account in the UK, with an 8% interest rate, albeit with a £200 monthly deposit limit. They also mention the First Direct regular saver and other options that may be more accessible for those without a current account.
🌳 Ethical Banking and Alternative Savings Options
The speaker delves into ethical banking, stressing the importance of aligning one's savings with personal values. They mention specific banks and building societies that are known for their green initiatives and provide a list of top-performing easy access accounts and fixed rate Isas. The speaker also introduces alternatives such as premium bonds and the lifetime Isa, particularly for those who have maximized their Isa allowance or are first-time homebuyers under 40. They emphasize the tax-free benefits of these options and provide a comprehensive overview of the best savings accounts available in 2024.
Mindmap
Keywords
💡Easy Access Savings Account
💡Emergency Savings
💡Interest Rates
💡Regular Savers
💡ISA (Individual Savings Account)
💡Personal Savings Allowance
💡Tax-Free
💡Lifetime ISA
💡Notice Accounts
💡Cashback
💡Overpaying Mortgage
Highlights
The video discusses the importance of having different types of savings accounts for various financial needs in the year 2024.
Easy access savings accounts are recommended for emergency savings and short-term expenses.
The general rule of thumb is to save three to six months of essential expenses for emergencies.
For irregular income workers, it may be beneficial to save an even larger amount for lean periods.
The Santander Edge saver is highlighted as the top pick for easy access accounts, offering 7% interest for the first year.
The Edge saver's high interest rate is only applicable to the first £4,000 saved.
The video suggests considering notice accounts for slightly better rates on emergency savings if access to the funds is not immediately required.
Regular or monthly savers are recommended for habit-forming savings and higher interest rates.
Nationwide is mentioned as having the highest paying savings account with an 8% interest rate for savings up to £2,200 per month.
Fixed rate regular savers can be a good option in anticipation of a potential base rate cut in 2024.
The personal savings allowance in the UK is £1,000 for basic rate taxpayers and £5,000 for higher rate taxpayers.
Individual Savings Accounts (ISAs) are recommended for tax-free savings, with a £20,000 annual allowance.
Stocks and shares ISAs are suggested as a priority over cash ISAs for those looking to invest.
Zopa's Smart ISA is highlighted as a top pick for easy access ISAs, offering 5.08% interest.
The video mentions that premium bonds can be an alternative for those who have used up their ISA allowance and need a large cash savings option.
Lifetime ISAs are recommended for first-time home buyers under 40, offering a 25% bonus on contributions.
The video emphasizes the importance of considering different savings options based on individual financial situations and goals.