Which savings account?

Want to go on a big holiday next year? Thinking of buying a house? Come into a little money? Start saving.

A savings account can have a variety of uses and could hold an emergency fund to rescue you from the next nightmare situation, but which type of account is right for you?

Cash Mini ISA

This is perhaps the one you will have heard of most, but still don't know what it is? Well ISA stands for Individual Savings Account, a tax-free savings/investment scheme that was introduced by the Government in 1999 to replace Personal Equity Plans (PEPs) and Tax Exempt Special Savings Accounts (TESSAs).
Interest rate: variable but as it is tax-free there are many benefits.
Minimum amount to open: anything, but you can't exceed £3000 cash investment in each tax year. If you have a Cash Mini ISA, you can't also have a Maxi ISA (holds a combination of cash, shares, and insurance up to the value of £7000) open during the same year.
Best use: For tax payers who wish to avoid paying Capital Gains Tax on their interest. These accounts hold no benefits for non-taxpayers.

Instant access

These accounts allow you access to your savings instantly or within a few days without a penalty.
Interest rate: As the account is so flexible, a lower variable interest rate will usually be offered, however graduates may be able to enjoy the benefits of high interest and instant access for the first couple of years after a degree.
Minimum amount to open: £0
Best use: Good as an emergency fund, or a chance to start saving yet still allowing you access to the cash should you really need it.

Notice Accounts

These require plenty of notice to be given before withdrawals can be made, usually between one and three months however you can sometimes access the money instantly if you are willing to pay a penalty.
Interest rate: Higher than instant access accounts, variable.
Minimum amount to open: Around £100.
Best use: Trust funds, inheritance, larger sums of cash that you want to build up but don't need to get your hands on easily, such as a mortgage downpayment.

Bond or Term Accounts

These pay much higher rates of interest because they do not allow any withdrawals until a set date.
Interest rate: Fixed at a competitive rate
Minimum amount to open: Around £1000.
Best use: Inheritance or similar, such as money to pay for college fees or a swanky wedding.

Regular savers accounts

These require a commitment to invest each month, encouraging regular savings rather than lump sum investments. Access varies from instant to fixed term.
Interest rate: Variable.
Minimum amount to open: A minimum and maximum investment per month is often required, these vary from between £10 - £20 min and £100 - £2000 max.
Best for: Easy savings where you put aside a small amount from your pay cheque each month. It may only seem like a small saving, but it all adds up.