Compare Innovative Finance ISAs

A savings account is a secure space to keep additional money. You can deposit a lump sum and keep adding to it every month to allow you to save up and afford to make a significant purchase. You will also earn interest on top of your savings, giving you a bonus when you come to withdraw the money for eventual use.

You can open a savings account online, but will usually be required to submit personal details such as your name, address, employment details and national insurance number in some cases. Depending on the provider and type of savings account, you may also be credit checked as well.

This depends on the interest rate that is assigned to your account. The larger the percentage, the more you can earn on top of your savings.

You will often find that the longer you can leave your savings untouched, the higher the interest rate you will receive. Notice savings accounts or fixed rate savings accounts usually require you to leave your savings for months or even years before you can withdraw.

Furthermore, if you don’t mind a small amount of risk, you can get a higher interest rate through peer to peer investment accounts or innovative finance ISAs.

Easy access accounts will require a small delay before you can withdraw your savings, whilst instant access means you can withdraw straight away. Given the availability of your funds in this way, it usually means your interest rate will be lower than other types of savings account.

A savings account where you have a fixed rate of interest for an agreed period. Standard fixed rate periods include 1 year, 3 years and 5 years where you will have to leave your savings untouched.

An ISA stands for an Individual Savings Account, and is a savings account you never have to pay tax on. This means a better return for the saver, but you are also limited by your annual allowance, which is currently set at £20,000. For example, you can have a maximum of £20k in your ISA, or you can spread this amount over multiple ISAs, such as a cash ISA, innovative finance ISA and investment ISA.

Peer to peer lending (or P2P lending) is where you are matched with borrowers who would like to take out a secured or unsecured loan.

You deposit your money just like a savings account. Your provider will then lend your deposits to an individual or business as normal, with an agreement that the funds will need to be repaid with additional interest on top.

It includes a small amount of risk, but you can often get a much better interest rate compared to a standard savings account.

Depending on the type of savings account you have, there will be an agreed period you will have to wait before making a withdrawal. For example, with a notice savings account you might have a notice period of 60 days before making a withdrawal.

If you withdraw before the agreed set period has elapsed, you will usually have to pay an additional fee.

You can open a children’s savings account and pay into it to build up their savings for the future. Alternatively, if your child is aged over 7, they can manage their account independently, teaching them how to manage money from an early age. There are also investment ISA’s available, known as a ‘Junior ISA’, however capital is at risk and ISA rules apply.

You can open a business savings account in exactly the same way as an individual, meaning that you can put money aside that you can re-invest back into your company at a later date.