When it comes to the health of our personal finances, our choice of savings account can be key.

When choosing a savings account, many people will go straight for the one that looks good on paper at first glance.

However, you could be losing out if you're not double-checking the finer details of saving accounts.

Kevin Mountford, co-founder of Raisin UK and savings expert, highlighted the importance of choosing the right savings account in today’s challenging financial environment. 

How to know you have a good savings account

Interest Rates

”Interest rates are one of the most important factors when choosing a savings account.

"Even a small difference in rates can have a significant impact over time, especially when compounding is considered.

"It’s worth spending time comparing rates across different banks and account types, as ultimately the highest interest rate will help your money grow faster.”

Deposit Protection

“Security is crucial. Always check that your savings are protected by the Financial Services Compensation Scheme (FSCS) or similar scheme, which protects up to £85,000 per person, per institution.

"Knowing your money is safe brings peace of mind, and this protection is a key factor when considering where to save.”

Access to Funds

“It’s important to think about how easily you can access your savings when you need them.

"Some accounts, like fixed-term savings accounts, might offer higher interest rates but limit access to your funds for a certain period.

"Always ensure the account you choose matches your financial needs - whether you need immediate access or are comfortable locking your money away for a better return.”

Account Fees

“Fees can quietly eat into your savings if you’re not careful.

"Look out for any hidden charges or maintenance fees that can reduce your overall returns.

"While the interest rate might look attractive, these fees can erode your gains over time.

"Make sure to weigh up the overall cost of the account. Online savings marketplaces like Raisin are free to savers to ensure they get the most out of their money.”

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Fixed vs Variable Rates

“Understanding whether an account offers a fixed or variable rate is critical.

"Fixed-rate accounts provide stability, as your interest rate won’t change, which can be a good option if you prefer certainty and looking to lock in higher interest rates that we have seen recently.

"On the other hand, variable rates might increase in the future but could also fall. Choose according to your risk tolerance and the economic outlook.”