In both the US and the UK, there are numerous types of accounts for saving, but a great way to start saving is to firstly research balance transfer credit cards so that you can minimize any outstanding debts and make your money work harder for you.
Balance transfer credit cards are useful for savers because they generally offer a zero or low rate of interest on your transfer amount, which means you pay off a smaller amount of interest and can begin to save much more quickly.
However much you have to save, whether it is a proportion of your monthly income or a lump sum inheritance, there is a method of saving that will be right for you.
In both the US and the UK the standard savings accounts are still popular due to their simplicity and in America are often referred to as ‘passbook saving accounts’. These accounts can usually be started with a small deposit, have no minimum term commitment and can be easily accessed, but only offer a low rate of interest.
Interest accrued by savings can be taxable, but in the UK, the ISA is a form of saving which is legally tax-free. In any one financial year, that runs from April to April, depositors can invest up to a maximum of £5,340 and can choose a tracker or fixed rate of investment. Fixed rates tend to give a higher return because they often stipulate that you cannot access the money for a set period of time.
In the US money market, savings accounts, generally referred to as MMAs, can offer a higher rate of return on your savings, although there are conditions. The minimum account deposit tends to begin at the $1,000 dollar level and any dip below this amount will be penalized by a loss of interest accrued during this time.
These accounts are usually most suited to individuals who are able to maintain at least the minimum balance level, but who may also need instant access to their savings.
In both the US and the UK there are similar financial schemes available for those people who have a larger sum of money to invest.
In the UK, depositors with a lump sum of money can access various accounts including the fixed rate bond, which will usually offer a significantly higher return on your savings but require a larger minimum deposit and a certain time commitment.
In the US, high-yield saving accounts follow a similar format and offer significantly higher rates of return, but depositors are penalized should they not maintain the minimum amount or not make regular payments.
As you would expect, online banking is becoming more commonplace in both the US and the UK and many depositors find this an easier way to manage their savings.
The advantages of online banking include instant access to your account at any time of the day or night, which can make the day-to-day running of your finances more efficient. Many online accounts offer a higher rate of return for savings, because this type of account costs less for the company to administer.
Creating some form of savings is prudent in an ever-changing world where job insecurities and global economic factors trickle down to affect people at an individual level. Research the options available thoroughly to find the most appropriate and beneficial account for your style of saving.
Even small amounts can grow to something more substantial, so invest wisely now and reap the rewards in the future.