When signing up for a new savings account you might be tempted to go for the first one that takes your interest.

But it can often be worth taking a few extra moments to fully understand what the account has to offer, including two key details.

Savings accounts help you save money while gaining interest and are separate from spending accounts.

To help you know you are signing up for the right savings account, Simon Holland, Chief Product Officer at Wealthify shares the two most important things to look for.

The two things vital to a good savings account

Access restrictions to your money

When deciding which savings account is right for you, it’s important to consider whether there will be any restrictions to accessing your money.

Some accounts (usually those with a higher interest rate) will limit the number of withdrawals you’re allowed to make; require you to give a notice period before you can withdraw your money; or even charge you a penalty if you don’t keep your money locked in for the agreed amount of time. 

If flexibility is important to you, look for an account that will give you ‘instant access’ to your money, with no restrictions, and allow you to withdraw your savings within minutes.

It's important to remember that there can be a difference between ‘instant access’ and ‘easy access’, and not all ‘easy access’ accounts might actually be what they seem, so check the small print. 

Interest rate and how it’s paid

When it comes to opening a savings account, it goes without saying that you’ll want to look for a good interest rate.

This not only means finding out what the current rate is, but what it might be in the future.

After all, there’s no point doing all that research to find the best savings account for you, only to later be disappointed that the rate falls off a cliff after an introductory period. 

RECOMMENDED READING

The interest rate is generally high – and locked in – on ‘fixed’ accounts. However, be aware that if you need to take your money out for whatever reason during the lock-in period, you may need to pay a penalty. 

Picking an instant access base rate tracker product can help to ensure you’re continuously getting a competitive rate, without any nasty penalties for withdrawing your money when you need it.

This means that the interest rate on your savings tracks the Bank of England’s base rate minus a margin —although be sure to check what this margin is compared to other trackers on the market.