January isn’t the easiest month when it comes to money. Chances are you’ve just received your Christmas credit card bill and your bank balance is looking drier than those cost-cutting homemade sandwiches you’ve been gnawing on for two weeks.

So isn’t it even crueler that now – in January of all months – that we punish ourselves even more by looking for a new home or a better savings account? On the face of it, yeah. But now is actually the most popular time to go on the hunt.

Whether you subscribe to ‘new year, new me’ – or just want to regain some sense of financial control – there’s no reason why saving for a house deposit needs to be a headache. The first place to start is finding the right account. Then once you’ve got it opened, you can start the hard work after that.

Preferably next month.

How to compare savings rates

The first thing on everyone’s mind when it comes to saving is getting the best rate. Well, unfortunately, this economic climate has put interest rates at rock bottom. And there isn’t much evidence to suggest it’s going to change soon.

Anyway, on a more positive note, you can choose from plenty of digital tools to help you compare rates. The most popular websites include moneysupermarket.com, moneysavingexpert.com, and comparethemarket.com.


Instant access vs. fixed rate

When you’re choosing the right savings account, you’ll always be given two options: instant access or fixed rate.

It’s a bit confusing, really, because you’re actually comparing two different things:

  • Instant access means you can make withdrawals and deposits to your account 24/7, without getting a penalty (usually a reduction in your interest rate). The main downside, however, is that you’ll generally ‘pay’ for this flexibility with a lower overall interest rate compared to a fixed rate account.
  • Fixed rate means you’ll receive (you guessed it!) a fixed rate for a specific amount of time. It’s usually between 1-3 years and after that you’ll revert to an instant access account or a variable interest rate.

So whichever one you choose depends on what matters most to you:

  • Getting 24/7 access to your savings, but with a potentially lower interest rate (Instant Access)
  • Getting a higher interest rate, but you can’t access your money for a set period (Fixed Rate)


House deposit

Manage your savings on the go

Another thing to keep in mind is how you want to manage your account. Some people find online banking is a good way to manage their progress and make sure they reach your goal. Others might find it’s too convenient and tempting to make withdrawals, so they’d prefer the old school method.

Here’s the different options you’ll likely be given:

  • Online/mobile banking – good for 24/7 access and doing things DIY-style, bad if you need to speak to someone directly
  • Telephone banking – good for getting 1-2-1 support, bad because of charges and limited opening hours
  • In branch – good for speaking to someone directly, good because of closures and limited opening hours
  • Post Office – good because they’re convenient, bad for doing anything more than making deposits/withdrawals

All you need to do is decide how vigilant how you want to be about saving.


Saving for a house deposit

Do you have any tips about how to save in the New Year? You know what to do. Share your thoughts with us on Twitter.