What's the best product for your savings?

To fix or not to fix? That is the question. It’s certainly one many savers are asking now that interest rates have dropped. Do you lock your money into a fixed rate account? Or would you prefer an easy access variable rate savings account?

I’m here to help you decide. But first, what are fixed rate and variable rate savings accounts?

• Fixed rate account

  Your money is typically tied up for the term you choose – usually one, two, three or five years. And during that term, your interest rate would stay the same.

• Variable rate savings account

  This type of account is usually easy access, which means you can take your money out whenever you need it. The interest rate you get when you open an account can go down as well as up.

Which is the best product for you?

To be honest, there isn’t really a right or wrong answer. It all comes down to you – and what you want to achieve from your savings. It could even be wise to use both options for different goals you have.

To help you work out what might be right for you, there are some key things to consider.

For savings you need to access

A variable rate savings account may be the best option. Most variable products allow you to dip into your money whenever you need it – for things like unexpected bills, or last-minute holidays.

• Flexibility to access your money.
• You can keep adding money to your savings account.
• The interest rate can change over time so it's likely to go down as well as up.
• As rates can change, you might not be able to plan ahead as well as compared to a fixed rate account.

Check out our easy access savings accounts.

For money you don’t need right now

A fixed rate account could be the best option to help your money work harder. It’s a really good way to save for goals a few years away, like a special holiday or wedding.

• The interest rate is fixed for the term of your account. So, you’ll know at the start how much you’ll earn over that time.
• You won’t be able to dip into your savings, reducing the temptation to spend.
• If interest rates go down, the interest rate on your fixed rate savings will always stay the same.
• You may need to pay a fee/charge if you want to access your savings before the end of the fixed term. Some accounts do not permit any early withdrawals or closure.
• You won't be able to continue to pay in throughout the fixed term.

Check out our range of fixed rate bonds and our fixed rate ISAs.

Why it’s important to fix your rate now

If you’re keen to use a fixed rate account for parts of your savings, it might be worth exploring your options now. Rates are dropping and expected to fall further in the coming years – but there are still some great deals out there that could help to boost your savings.

You may find some variable rates are higher than fixed right now. Yet it’s important to think ahead. If rates do continue to drop, variable rates will no doubt follow. And chances are, variable rates in a few months’ time won’t be as good as what fixed rate products are offering now.

By fixing your rate, you don’t have to worry about what rates will do in the near future. You can feel assured that the rate you choose will stay the same until your term ends. You’ll always know where you stand, without having to search for the best deals all the time.

Are you a Skipton Building Society member?

Being a member means having access to exclusive member rates and accounts, you get more because membership means more.

Don’t forget your future goals

These are your bigger goals for the future – like retirement or financial security for your children. For these goals, it’s a good idea to consider investing – especially if interest rates continue to fall in future.

Investing is seen by many as the best way to build your money over time. It’s still important to have savings accounts for short to medium-term financial goals. But over the long-term, investing could get your money working even harder and better help you achieve your future goals. That’s providing you’re happy to accept some risk to your money and you don't need access to your funds for at least five years.

Want to know more about investing? You could benefit from a free initial consultation to decide if it’s a worthwhile step. We also offer financial advice to help you invest in a way that’s right for you, with no pressure to act.

Your Personal Savings Allowance (PSA)

This is the total amount of interest you can earn on your savings each tax year (excluding ISAs) without paying tax on that interest.

Find out how much your Personal Savings Allowance is – and how you could benefit.

Still not sure what to do?

Some conversations can be confusing. But talking about your savings doesn’t need to be one of them. With our My Money Review service you can get specialist advice that could help your money go further.

This is a quick chat with one of our savings specialists. Simply tell us about your situation, and we’ll advise you how to use your savings pot.