What is a saving account?
- A savings account is a specific kind of bank account designed for depositing money while earning interest. These accounts are commonly employed to accumulate funds for short-term objectives, such as saving for a home down payment, a vacation, or covering unforeseen expenses like car repairs or medical bills.
- Savings accounts offer several benefits when compared to alternative account types like checking accounts and money market accounts. Firstly, savings accounts typically yield higher interest rates than both checking and money market accounts, facilitating the accelerated growth of your funds.
- Secondly, savings accounts are safeguarded by FSCS insurance, ensuring that your deposits are protected up to £85,000 per depositor, within each ownership category, at every insured bank. Consequently, even in the event of a bank's insolvency, your savings remain secure, and you won't face any loss.
- Lastly, savings accounts are generally more liquid than other investment avenues such as stocks and bonds. This means that you can swiftly and easily access your funds whenever the need arises.