This section describes what to consider when it comes to adding funds to your savings account once it is up and running.
Some savings accounts stipulate that you must make a deposit, of at least a certain amount, every month for a set number of months out of the year (see section on Regular savings accounts).
Other savings accounts let you put money in whenever you like without penalty (see section on Instant access savings accounts). Some of these will only let you save up to a set amount each year (see section on Individual Savings accounts (ISAs))
The traditional way of depositing money into a savings account is to pop into a local branch of the bank or building society, fill in a paying-in slip and hand it, along with the cash or a cheque, to the cashier.
This is ok if you can get to your local branch easily and motivate yourself to go to the effort of making regular trips so that your savings will grow.
However, if it’s one of the things stopping you from saving, why not consider one of the alternatives below.
The Association for Payment Clearing Services (APACS) defines a standing order as “an instruction you give to your bank or building society to make payments, usually on a regular basis, to a specified third party’s UK bank or building society”.
You can arrange an instruction from your current account to a savings account if they are held with the same bank or if they are each with separate ones. This means you can shop around for the savings account the best interest rate.
Currently, it takes three days for the money to arrive in the receiving account. Following the introduction of a faster payments system later this year, they will be processed on the same day.
Standing orders are a brilliant way of making regular contributions to your savings, especially if your willpower isn’t particularly strong.
If you are going to set up a standing order to transfer funds from your current account to your savings account, make sure that you coincide the payment date with the time when you know you will definitely have money in your current account.
Pay day is a good time for most because the payment can be treated as just another bill and potentially be forgotten about. This should make your saving a lot easier in terms of willpower and in terms of the reduce effort in getting the money into your savings account.
An increasing number of us are now choosing to use internet banking, and it’s not hard to understand why:
• If you hold more than one account with the same bank, you can instantly transfer funds between your accounts
• You don’t have to stand in a queue in the bank for half of your lunch break to pay in funds. You can do this easily, in the comfort of your chair, on your computer.
• Statements can be viewed online and you can check your balance at the click of a button
• Standing orders can be set up via your online account
These advantages make saving a lot easier. It also increases the access to your funds, if you have a current account with the same bank, which can be both a positive and a negative factor. It’s positive because you can transfer funds to and fro but negative for the same reason as you may decide to dip into your savings more.
If you want to transfer money between accounts held with different banks, transfers will take up to three working days to clear. It could be argued that this is still better than queuing in a busy bank.
Some banks require you to have a current account with them before you can have online access to your savings account.
You can arrange for money to be transferred into your savings account from another account by ringing up the telephone banking number of the bank with whom you have your current account.
- What is a savings account?
- Savings accounts and interest rates
- Tax and UK savings accounts
- Opening a savings account
- Adding money to a savings account
- Accessing money in a savings account
- Regular savings accounts
- Instant access savings accounts
- Online savers
- Individual savings accounts (ISAs)
- Helpful links for further savings information