Savings made clear
Putting a little bit of money away regularly is the best way of saving up for those expensive things like a holiday, furniture or a special family occasion. There are two ways to save - short term and long term. Savings accounts are for times when you need to get at your money quickly. They are different from investments which are really for the longer term.
What are savings?
You put your money into an account where it earns interest without the risk of loosing any of it (short of a bank, credit union or building society collapse). You can usually get your money out immediately or after a notice period, sometimes 30, 60 or 90 days.
Where to save.
A wide range of savings accounts are available from banks, building societies, credit unions and National Savings and Investments.
Inflations occurs when the prices of the goods and services purchased in an economy increase. The effect of inflation on your money means that the money you save will buy less each year. To protect your savings against this, you should look for an after-tax interest rate that is more than the rate of inflation. Or if you want to put your money away for a longer period and are prepared to take the risk that your money could fall in value, you could put some money into an investment linked to the stock market.
The value of your investments can fall as well as rise.