Should I bounce from Account to Account?
Technically speaking, yes. It’s always better to get paid interest by the banks, and the more you get the better. Easy answer, right?But, can you be bothered? And is it really worth it?
No prizes for how long you have to wait to get access to the money kept in one of these accounts.
If you don’t have a savings account and just let the money build up in your current account, then get a savings account. It won’t be much extra money, but it’s better than nothing, right?
With these accounts, you have to give notice to the bank when you want your money back. Now that’s not to say you can’t get your money back as soon as you want it, but there will probably be a penalty of losing any interest you had earned by taking it out sooner.
If you have a lump sum of money that you know you’re going to need within a relatively short timeframe, i.e. under 2 years, then these accounts allow you to generally keep up with inflation. So maybe it’s a future tax bill, house purchase, something like that.
A savings bond isn’t like a normal savings account, but it acts very similarly to the Notice Accounts. So fixed rate of interest over a fixed time period, and if you pull your money out early, you’re gonna get spanked.
See the last one above, and repeat it to yourself.
Which should I go for?
Whichever you want. Personally other than a few occasions when people are squirrelling money away for a tax bill, then I don’t really like notice accounts. For the difference, less than 0.5% a year interest, I prefer to have the option of getting access to my money when I want it.Is it worth jumping about? It depends how much money you have in savings. Let’s say you have £10,000 set aside. The difference between the best 2 year fixed bond and instant access is going to be around £5.42 a month.
Or.... Option 2
Just throwing this in as another option to consider… I personally quite like Premium Bonds from NS&I. They are a bit like notice accounts, but the other way around. It usually takes a month or so for your money to be put into the draw for any return. But, the plus side is you can get your money instantly when you do need it.The other good thing is its a tax-free return. So the headline rate of 1.4% interest can be the equivalent of a lot more if you're a higher rate tax payer.