Teachers get an 'A' for savings

New research by the Co-operative Bank shows that teachers save the most out of 25 professions.

Those working in education save on average £2,125 each year, higher than those working in finance (£1,999) and over four times the amount saved by those in artistic and sport related jobs (£494).

Those working in agriculture and utilities save the least with those working in agriculture putting away just £343 on average each year. Us media types typically save £968 a year.

Whatever amount you can afford to save each month or year, it’s important to put it in the best paying account for your needs. To help you decide we’ve checked out the top paying regular savers, instant access accounts and fixed rate bonds.

Regular savers

If you are just beginning to save, regular savings accounts are a good option as they often pay a high rate compared to other savings accounts.

However, you will have to commit to a fixed monthly contribution between a minimum and maximum amount (typically £25 to £500), usually for 12 months.

The rate on the account normally falls after a year – but that’s a good time to move your nest egg into an Isa or bond.

The best-paying regular saver available to anyone is currently Cheshire’s Platinum Monthly Saver Issue 3 which pays 5%.  Account holders can save between £100 and £500 a month.

First Direct current account customers can open a regular saver which pays a whopping 8%. Monthly contributions are capped at £300 but that still means that if you saved the maximum you can earn £156 gross interest a year.

Instant access

As the name suggests, instant or easy access accounts offer instant access to your money so they’re good if you need cash for emergencies.

ING Direct is currently No.1 for instant access, paying 3.1%. However the rate comes with an introductory bonus of 2.56% for a year meaning that after 12 months the account will pay just 0.54% AER.

Meanwhile the Post Office and Principality building society both pay 3.01% and both including a 1.36% bonus for 12 months.

In some comparison tables, you'll see Coventry Building Society's Online Saver 2 account ahead of the ING Direct account. Coventry's account pays 3.15% including a 1.15% bonus,, but you can only make four penalty-free withdrawals each year, so it's not a true instant access account.

If you opt for an account with an introductory bonus you should make a note of when the bonus period ends and be ready to shop around for a better account when the time comes – otherwise the rate will fall dramatically.

Fixed rate bonds

Fixed rate bonds are a good option if you don’t mind tying up your savings for a fixed period of time. With a bond the interest rate is fixed for a set period of time – anything from six months to five years.

However you won’t be able to access your money penalty-free during this period so you should only save in a bond if you have other, more accessible cash elsewhere.

In general the longer you fix for, the better the interest rate. At the moment you can fix for one year with Aldermore at 3.55%, for two years with BM Savings at 3.9%, for three years with BLME in a Sharia’a compliant account at 4% and for five years with AA at 4.6%.

Cash Isas

Cash Isas are a good home for your money as the interest is paid tax-free. Every adult in the UK can save up to £5,640 this year in a cash Isa and up to £11,280 split between a stocks and shares Isa and a cash Isa (with a maximum of £5,640 in a cash Isa).

Like other savings accounts, cash Isas can be instant access or fixed rate bonds. Halifax is currently offering a five-year fixed rate Isa at 4.5% and four years at 4.35%. Santander has a one-year fixed rate Isa at 3.5% while Saga offers one-year fixed at 3.6% to over-50s only.

Cheshire Building Society's Direct Cash ISA (Issue 2) is the top-paying instant access Cash ISA with a cracking 3.5% rate. This includes a 2.5% bonus which will be withdrawn in October 2013.

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