Savings accounts | Compare savings accounts | NatWest (2024)

FAQs

When comparing savings account options what will you typically compare? ›

There are several different types of savings accounts to choose from. Traditional accounts offer lower fees but also earn lower interest rates, while high-yield accounts usually offer the best ROI. Specialty savings accounts can help you save up for a specific purpose or introduce kids to the intricacies of banking.

When comparing savings accounts, you should select the account that has the: lowest annual percentage rate.

The main difference between checking and savings accounts is that checking accounts are primarily for accessing your money for daily use while savings accounts are primarily for saving money. Checking accounts are considered “transactional,” meaning that they allow you to access your money when and where you need it.

Saving is compared to savings as saving is income that has not spent but accumulated to be used in other activities and investment. Savings is the amount of money that is saved from income to be used in investment by investors.

The effective annual interest rate does take compounding into account and results in a higher rate than the nominal. The more compounding periods there are, the higher the ultimate effective interest rate. The higher the effective annual interest rate is, the better it is for savers/investors but worse for borrowers.

Current and savings accounts are made for different things, and they offer different benefits. Current accounts are designed for routine transactions of businesses and companies, whereas savings accounts are for people who desire to save. Interest rates in Savings Accounts are higher than those in current accounts.

When comparing saving accounts should a consumer look for simple or compound interest? ›

It depends on whether you're saving or borrowing. Compound interest is better for you if you're saving money in a bank account or being repaid for a loan. If you're borrowing money, you'll pay less over time with simple interest.

Interest rate: The interest rate is often the headline-grabber. Some accounts may lure you in with bonus rates, so it's wise to scrutinize their duration and any strings attached, such as minimum regular savings. Interest might be fixed for a set term or variable as the market changes.

A money market account (MMA) is a savings account that typically pays higher interest rates than regular savings accounts. MMAs usually offer tiered rates, meaning you can earn an even higher rate on large balances or on part of your balance over a certain level.

Checking accounts are better for regular transactions such as purchases, bill payments and ATM withdrawals. They typically earn less interest — or none. Savings accounts are better for storing money. Your funds typically earn more interest.

The biggest difference between saving and investing is the level of risk taken. Saving typically results in you earning a lower return but with virtually no risk. In contrast, investing allows you the opportunity to earn a higher return, but you take on the risk of loss in order to do so.

Saving provides a safety net and a way to achieve short-term goals, while investing has the potential for higher long-term returns and can help achieve long-term financial goals. However, investing also comes with the risk of losing money.

Difference Between Current Account and Savings Account

A savings account is most suitable for people who are salaried employees or have a monthly income, whereas, Current Accounts work best for traders and entrepreneurs who need to access their accounts frequently.