The top 18 savings accounts!

If you're looking for a new home for your savings, check out these top 18 savings accounts...

Whether you have a holiday coming up, or you've got a stack of Christmas presents to buy, or you simply want a nest egg to fall back on in case of emergencies, putting a little money aside into a savings account each month is really important.

So if you're looking for somewhere to stash your cash, you've come to the right place!

Instant access savings

I don't know about you, but when it comes to savings accounts, I feel much more at ease knowing I can get my hands on my cash whenever I want without having to pay a penalty.

So if this is how you prefer to operate, your best bet is to invest your money in an instant access savings account. And if you're wondering which one to plump for, the following table should give you a clearer idea:

As you can see, the very best account available is the Citibank Flexible Saver Issue 6 which offers a tasty interest rate of 3.30%. Just bear in mind that this rate includes a fixed bonus of 2.25% for 12 months. Once that year is up, the rate will drop to a paltry 1%, so you'll need to move your savings to a more competitive account.

I'm also a big fan of the ING Direct Savings Account which offers a guaranteed rate of interest of 3.20% for the first year. This is the only savings account in the chart which offers this kind of guarantee - all other rates are variable, meaning they could fall at any time (although in theory they could rise too). Just be aware that any savings in the ING Direct Savings Account will be protected by the Dutch deposit scheme, not the UK one.

The big downside to both the Citibank Flexible Saver Issue 6 and the ING Direct Savings Account is that they are only available to new customers. So if you've already got an account with Citibank or ING, you might want to consider taking out one of the other savings accounts in the chart - such as the Sainsbury's Finance Online Saver or the Birmingham Midshires Telephone Extra account.

That said, if you want to be able to access your funds whenever you want - which, in my view, is how an 'easy access' savings account should operate - watch out for the Sainsbury's Finance Online Saver. That's because this account only allows you to make three withdrawals in the first year - make more than this and the interest rate will fall to a pathetic 0.5%.

Similarly, the Lloyds TSB Incentive Saver stipulates that if you make a withdrawal, you'll receive no interest on your savings during that month - not exactly what I call 'easy access'.

Shorter fixed rate bonds

So that's instant access savings accounts sorted. But what if you can afford to lock away your money for a few years? Does that mean you'll get an even better interest rate?

The chart below shows some of the best one and two year fixed rate bonds:

Looking at this chart, it's pretty clear that compared to instant access savings accounts, fixed rate bonds offer higher rates of interest. But bear in mind that you'll need to have at least £500 to invest if you want to open one of these fixed rate bonds.

What's more, you won't be able to access your savings for the entire term of the bond - and you won't be able to add to those savings either, so these bonds are really only suitable for those of you with a lump sum to invest.

Longer fixed rate bonds

If locking away your money isn't a concern, you might want to tie up your funds for even longer than one or two years.

So in the chart below I've outlined some of the best fixed rate bonds for anyone wanting to lock away their money for three years, four years, or even five years.

In this case, the interest rates offered are even higher - in fact, if you're prepared to tie up your funds for five years, you can enjoy an interest rate of 5.38% with the Skipton Building Society Fixed Rate Bond.

But while this rate is pretty impressive, if you are thinking of taking out a fixed rate bond for five years, make sure you think it through fully.

Although the base rate is still sitting at a miserable 0.5%, and it seems likely to remain that way for the next year, it's not going to stay that low forever. And that means that in three, four, or five years, you might find that interest rates on savings accounts are far higher than they are now. And if you've tied yourself into one of these bonds, you might find that what you thought was a competitive deal at the time, no longer is.

So, personally I would be a little reluctant to tie up my funds for that long. And I'd be far happier putting my money in a one or two year fixed rate bond instead.

Get help from lovemoney.com

If you need a bit of help getting into the savings habit, we can help.

First, adopt this goal: Build up an emergency savings pot

Next, watch this video: How to save when you've got no money

And finally, why not have a wander over to Q&A and ask other lovemoney.com members for hints and tips about what worked best for them?

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