The most important thing to remember when it comes to putting your money somewhere is that you know what is going to happen to it. It is important that you understand the terminology connected to financial products because it allows you to look around for a really good deal, and hence guarantee that your money goes as far as it possibly can. Here's a guide to basic terms that are particularly relevant to shopping around for a savings or bank account.
Capital
In regards to a savings account, capital is quite simply the amount of money that you put into the account.
Term
The term of any deal is the amount of time for which it lasts. In regards to savings account, the term you should consider is in relation to the interest rate. Some high interest accounts (though they're not usually straightforward savings accounts) have a good rate for a certain period of time, before they revert to a lower rate. These can be good if you can make the most of the high interest rate then move your money, but you should make sure that you can do that.
Interest and Interest Rates
Interest is generally the most important thing to look for when it comes to opening a bank account. The interest is the amount of money that the bank gives you each year as an incentive for saving with them. The interest rate is the figure that determines how much interest you will earn. For example, if the interest rate is 3% and you save ?100, at the end of the year you will have earned ?3 of interest leaving you with a total of ?103 in your account.
There are accounts out there that offer great value interest rates at the moment. There is even one that offers the average of the best five rates on the market, this is guaranteed to always be comparatively high for the financial climate, so is worth consideration.
These things are the important when it comes to looking for a bank account but not as important as the bank with whom you keep your money. Good customer service can be worth several percent on interest rates, as can a solid base. Alliance and Leicester who have recently been bought by Spanish banking giant Santander, and they have a good reputation for customer service so it might be worth taking a look at their rates.
