Like most other people you probably want to do all that you can to make your money work harder for you when it comes to savings, and it is therefore important that you choose a savings account that is both suitable and enables you to get a good return on your deposits. There are many different types of savings accounts available these days, and choosing the right account can be something of a minefield.

Like any other financial product it is important to compare different savings accounts in order to try and find the most suitable and competitive account. You should never be apathetic or naïve enough to assume that the best deal you are going to get is through your own bank, as this is usually not the case. You should also remember that interest rates and terms of savings accounts can vary significantly from one financial institution to another, so taking the time to compare can make a big difference.

Over the past couple of years some savers have enjoyed seeing better returns on their savings, as the Bank of England base rate hikes between August 2006 and July 2007 resulted in the interest rate on many savings accounts going up. However, interest rates have now fallen three times between December 2007 and April 2008, and sadly many financial institutions are all too quick to drop the interest rate on savings in line with the base rate.

Some financial institutions, however, have continued to pay a highly competitive rate of interest on savings accounts, such as the Icelandic bank Kaupthing Edge, which has ignored the last two rate cuts when it comes to savings accounts, continuing to offer 6.5% to savers. However, whilst the interest rate is a very important factor to consider when looking into the best savings accounts, there are also other areas that you need to consider in order to determine which account is best suited to your needs.

One of the things that you need to look out for is the withdrawal periods offered on savings accounts, as some accounts may charge you penalties in terms of interest if you make withdrawals without giving a certain amount of notice, or if you make more than a specified number of withdrawals a year. If you feel that you need ready and available access to your savings then you should look for an instant access account. However, if you can afford to leave your savings be for longer periods of time then you can afford to go for a notice account that pays a higher rate of interest.

Also, be mindful of the tricks of the trade that banks sometimes use in order to entice customers. Some may offer an impressive rate of interest, but this may be for a limited period, after which the interest rate may plummet. Make sure that you read the terms and conditions carefully so that you know exactly what sort of account you are putting your money into.