Deposit-type Accounts

The best returns from deposit-type accounts are often offered by the smaller building societies. But unless there's a branch, or agency, near you, you'll have to weigh the extra interest against the inconvenience of dealing with the account by post.

WARNING If you withdraw money from a notice account which has been open for less than the full notice period, you could end up with less money than you originally paid in. For example, with a 90-day notice account, you'll find that the full 90-day interest penalty has been deducted. So don't open an account with a long notice period if there's a risk that you'll need your money back early. And to avoid penalties once the account is past the initial period, make sure you give the notice required, and that you withdraw money on the exact day the notice period is completed. If you don't, some societies may insist that you start all over again and give fresh notice of withdrawal or incur the full interest penalty as if you'd given no notice.

WARNING Though the first £140 of interest from the

National Savings Ordinary account is tax free, the rate of interest is traditionally very low, making this account uncompetitive for most investors. And note that the higher rate quoted for the Ordinary account applies only if you keep the account for at least a year and have a minimum balance of £1000 - otherwise, the lower rate applies.

Click here for more information on Shares And Investment Trusts

Deposit (savings) Accounts

Where from? Building societies, banks, finance houses, National Savings Bank (through post offices).

How they work Subject to any minimum or maximum investments, you pay in whatever you want, whenever you want. The amount of your capital doesn't vary, but earns interest (which is usually added to your account but can be paid out on a regular basis with some accounts). Interest is usually variable and changes with the general level of interest rates in the economy. Some accounts offer higher interest if you have more than a certain amount in your account. You can withdraw your money instantly... see: Deposit (savings) Accounts

More money