We all know that having money set aside is something we can really benefit from – and, if we get it right, it means we will spend less time saving and more time deciding what to spend our money on. For some of us, knowing where to start when it comes to the subject of savings can be tricky. This guide gives you an understanding of why and how you should save as well as some additional information to help you along the way.
There are various reasons why it is important to save. In simple terms, we open savings accounts because:
We cannot predict what the future will bring. If we could predict the future, we would know exactly how much money we need and when we would need it. Unfortunately, none of us have this ability. When you deposit money into a savings account you’re giving yourself a safety net against future bills and expenses.
We want to build up a lump sum for a significant, often life changing, event. Whether it is a deposit on a new house, a dream wedding or paying for your children’s education, all of these key moments in life will need to be paid for. Having money in the bank ready for when these events arrive will put you in the best possible position.
We can pay for something in the future that we can't afford at the moment. Nowadays, it is too easy to buy something even if we don't have the money to pay for it. The 'buy now, pay later' approach can lead some people into financial troubles. By saving up the funds beforehand, so that the money is in your savings account before making a big purchase, you won’t have to try to absorb these costs further down the line.
We want to make money on top of our money. A savings account allows you to earn money on your savings in the form of interest. When you pay money into your savings account, you will be paid interest on this sum. The more money you save, the greater the return on interest you will receive. The benefit of saving for a longer period means that your money grows quicker because you don't just earn interest on the money you originally save, you can also earn interest on the interest - this is known as 'compound interest'.
Here at the West Brom, we understand that our customers have different needs and requirements when it comes to saving. Whether you’d rather have access to your money or you want to put it away for a while without touching it, we have a savings account that’s right for you.
To help you choose the best savings account for you, it is important to ask yourself:
1. How often will you need to make withdrawals from your account?
Do you want instant access to your savings or would you be prepared to lock your money away for a fixed period of time?
2. How do you want to manage your savings account?
We offer savings accounts that can be managed in our branches, and accounts that can be managed by phone, post or online. We also have accounts that will enable you to receive a monthly income from your interest.
3. How much do you want to save?
We have savings accounts that can be opened with as little as £1. Some of our savings accounts allow you to save flexibly and regularly, others only allow you to deposit a lump sum upon account opening.
4. Have you used your cash ISA allowance?
An ISA is an Individual Savings Account. They are a tax-efficient way to save money as you pay no tax on the interest you earn.
Whether you are new to saving or not, the financial world is full of terms and phrases that can seem unfamiliar or confusing. Our Savings A-Z guide is on hand to help make dealing with your money as straight forward as possible for you.
We have created a series of guides which are designed to give you the help and support you need when it comes to managing your savings.