Savings accounts for all life's essentials

Whether you are after a new motorbike or a new car, there are savings accounts out there for everyone. Finances mean something different to everyone at different times in their lives, so while one person may be interested in savings for a new motorcycle, the next individual will be interested in taking out a fixed rate isa to save for a deposit on their first home. Saving is all about setting money aside for those important things in life, so what may seem important to you at some stage in your life may not be so a few years down the line.

The option you take out should reflect a number of things including what you are saving for, how long you expect it to take you to save and your income. There is no point in giving yourself two years to save £10,000 with a mortgage and other bills to pay if you only have an annual income of £20,000, for example. The most important thing when it comes to setting up a savings account is to be honest with yourself, set realistic goals and ask for expert financial advice from the banks if you need it. There are also a number of great financial websites available online where you can get great impartial advice from industry experts, and see what other people are saying about different financial products, too.

In general, if you are saving towards something big like a wedding, savings for children after they fly the nest or a deposit for a first home, taking out an ISA with a fixed rate will guarantee a higher interest rate. With a higher interest rate being applied, this money will work harder for you. As it needs to be kept in the account for a fixed period of time though, if it is withdrawn before the end of this timeframe additional fees may need to be paid, and any interest that has accumulated while the money was held in the account may be lost. Not having instant access to your cash may be one of the reasons this option may not be suitable for some people. Then again, if you are saving with a specific thing or date in mind, such as a wedding day, then it may just be what you are looking for as the money has been ring fenced for that specific purpose.

Sometimes you don't need to have a specific thing in mind to be saving towards. While it is nice to treat yourself and your family now and again, sometimes it is just nice to have a little bit of money held in a rainy day fund for all those unexpected bills and expenses that always seem to crop up the week before payday. Having a savings deal where you are able to access your money whenever you need it is vital for many people who just do not know what is around the corner. An instant access ISA may not have the higher interest rate offered with the fixed rate option, but what it does offer is that added security that when things do go wrong, the money is always instantly available. Any cash taken out can also be replaced during the financial year as long as you do not invest more than the maximum amount - which currently stands at £5,200.

If you want to set up a savings account, it can be made a lot easier by contacting your branch and asking them to set up a standing order. For example, if you are hoping to put away £100 a month into an ISA, you can arrange for this to be taken out of your current account on the day you are paid. By setting this up, you will not even miss the money and before you know it, you will have a healthy sum saved up for whatever tickles your fancy.