Family savings or ISAs: Which is the best savings option?

The following article touches on what you should know when contemplating about taking up ISAs or Family savings accounts.

06:02 08 January 2014

The future is filled with very many uncertainties as far as finances are concerned. You have to consider all possibilities in great detail about your financial future. When retirement comes beckoning, you have to make sure that you are taken care of at all. Basically, you should have to ensure that you have a nest egg which you can take out funds at regular intervals. 

 

With the very many uncertainties that might threaten your income, it is prudent that you put some savings aside for a rainy day. Comparing and contrasting the available options comes in handy when you are just about to begin.

 

The first step in anything is to always have as many options to choose from and weighing the individual pros and cons. After doing all of that, you should take up the option that speaks to you and meets your perceived needs.

 

Ordinary savings accounts are straightforward when you open them. In terms of interest rates it is very minimal. Some of the money accrued from the interest rate is taxable.

 

ISAs, on the other hand, can be utilised in the following way: just deposit some money every year and you can access it during retirement without any hassle. ISAs are known for offering very competitive interest rates compared to ordinary savings accounts and they are very tax efficient.

 

ISAs are flexible in their access where you can access funds depending on your various needs. Transferring your old ISAs is very easy as all you have to do is consult a building society to take care of the entire process for you.

 

Ordinary accounts do not allow you the luxury of switching hence ISAs do and offer very good rates at that. However, you should ensure that the terms are favourable first before switching your savings accounts.