1. Setting your goal

It is important to set a realistic and achievable goal. What do you want to get from your savings? How much can you save? When do you need the money back? You might want to save a set amount by a target date or save up for a specific thing like a special day out or a new car. Your savings goal will help determine which account is best for you. If you have more than one goal you could use different accounts for each one.

2. Comparing savings rate

Banks usually offer new accounts offer a high bonus rate which is designed to tempt you in – but bonuses drop off after a certain period. Spend some time to shop around and don’t mind switching to get the best deals, set a reminder to switch at the end of any initial bonus rate. If you are very busy, opt for a rate that’s been more stable historically – you’ll find this info on the comparison sites.

3. Fixed term deposits or not

If you know you won’t be requiring your money soon, you may want to set up a standing order to your savings account or tie up your money for a year or more. If so, you could earn more attractive interest rate with a regular savings account or a fixed-term deposit or savings bond. But remember, with a fixed term account you may not be able to access your money immediately (or even not until the end of the term) – and there could be a hefty withdrawal fee.

4. Be smart for tax saving

Do you pay income tax? If not, ask to have your account interest paid gross – otherwise tax will be automatically deducted. If you are a tax payer, don’t forget you can earn interest tax-free in a cash ISA. But be sure you’re getting a good interest rate so the tax benefit isn’t cancelled out by lower returns.

5. Don’t keep all money in one bank

Cash Up to £85,000 you put into authorised UK banks or building societies is protected by the Financial Services Compensation Scheme. This meaning even if the bank collapse, the government would pay you back your deposited sum.