3 minute read

How to start saving for beginners

The term ‘savings’ can mean different things at various stages in your life, but it is ultimately the process of putting money aside for future use. That could be to buy something like a home or a car, or just for a rainy day or as a safety net should something change in your circumstances.

Whatever ‘savings’ means to you, it is something that we should all do. Even if it’s small amounts each month, it’s the routine of putting money aside, no matter how much, that is key to helping you maintain this habit throughout your life.

So, if you haven’t started already, follow our step-by-step guide below and enjoy seeing your savings pot grow. 

1. Decide the amount you can afford to save

Decide the amount of money you can afford to save, and the frequency – this could be weekly, monthly or a lump sum of money from something like a bonus.

2. Decide on the savings account that works best for you

Decide what type of savings account you would like. There are many types to choose from such as:

  • Salary Finance simple savings account - it’s a hassle-free savings account with contributions transferred directly from salary. To see if you’re eligible, click here
  • Instant Access Accounts: easy access to your money whenever you like, without having to pay any penalties. The majority of banks offer savings accounts which can run alongside your bank account so you can transfer money into your savings as and when.
  • Cash ISA: an account that pays interest tax-free, as opposed to savings accounts on which you may pay tax (such as instant access, fixed rate bonds, notice savings accounts)
  • Fixed Rate Bonds: usually offering a higher interest rate than instant access savings accounts, in return for locking away your money for a set period, usually between one and five years.
  • Investment ISA: a way to invest in a wide range of funds and other stock market investments whilst retaining the tax-efficient element of a traditional cash ISA.

Top Tip: If you choose to use a savings account online, most will allow you to name the account. Why not choose something that will stop you from withdrawing this money on a rainy day – like ‘new house fund’, ‘emergency only’, or even ‘do not touch!

3. Find the best rates

Check out the best rates available. There are numerous websites available where you can research the best rates available but make sure you use a reputable one such as Money Supermarket.

Most of the time you can apply and set up your account online in the comfort of your own home.

4. Keep tabs on your savings pot

Watch your savings grow, and feel comforted that you have a financial ‘buffer’ should something change in your income.

5. Review your savings

Regularly review your savings to check you continue to receive the best rates and to see if you can afford to increase the amount you are saving.

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