Hopefully there will soon come a point where you actually have some spare cash that you don't want to spend and will have the need for a savings account of some description. Again this makes life a whole lot more complicated - do you go for a building society account, term account, cash ISAs, share ISAs etc?

The options

The type of savings plan you take out depends on what you want to save for and whether you want to be able to have access to it or not. Investing your savings in anything that involves stocks and shares is going to involve an element of risk and are to be considered for the medium to long term. These sort of savings are thus more likely to be appropriate if you are certain you are not going to need to get your hands on the money and you already have some savings that you can readily access. If you are thinking of investing in this way it's always best to speak to your bank or to a financial adviser first.

The risk-free option

OK, so what we're after is a conventional savings account where we're not taking a risk with our money and can access it readily if need be. But there is still a large range of options to consider. Generally speaking however, it's possible to divide these into three broad categories - instant access accounts, notice accounts and ISAs.

Instant access accounts

This is the standard type of savings account that you are most likely to be familiar with. You pay in money as and when you can afford it, earn a rate of interest which is set by the bank, and can withdraw your money at any time. Most banks and companies offering banking products will offer this most basic type of account. Remember that rates at any given time can vary greatly so it pays to make sure that any savings accounts you have remain competitive. As with credit cards don't feel you have to be loyal and remember that you needn't have all your accounts with the same institution - some of the best rates are often with the internet banks or with retail stores rather than tradtional banks.

Notice accounts

Similar to instant access in that you can pay in when you can afford it but they tend to offer higher rates of interest. The price you pay for this better return is that you cannot get your hands on your money when you want - you have to notify your bank in advance depending upon the terms. The most common terms are 30 and 90 day notice accounts but others exist. Generally, if you do need to withdraw money without notice you are allowed to do so but will have to pay a penalty fee.

A variant on this type of account is the fixed term bond whereby you invest in a bond for a fixed period, say 6 months or one year. For the duration of the bond you cannot access any of your money but in return recieve a higher rate of interest that is FIXED for the duration of the bond. Thus, you know in advance the return you are going to get at the end of its term. Despite being called a bond rather than an account no risk is involved other than the risk that interest rates will rise and you will not get the benefit because you are locked in to a lower rate. Of course, if interest rates fall then you still get the fixed rate.

ISAs

Cash ISAs are savings accounts that are generally instant access but can attract better rates than standard savings accounts. The big difference, and the main benefit, is that the interest you receive on an ISA is tax-free unlike the above accounts (unless you are a non-taxpayer, then you can get interest paid tax-free on all of these accounts by asking your bank for form R85). Cash ISAs are very attractive for the regular of occassional saver, however there is a limit to the amount you can save in an ISA each year. For details on annual limits and the other ISA options view our brief guide to ISAs.

What next?

Saving is something you are going to have to do at some point, whether it's for a new car, holiday, or house deposit, so the choice of how you save is very important - you need to maximise the return you get so its worth putting in a bit of effort to make sure you get the right type of account and the best deal. Here are some of the most important questions to ask yourself before you start a savings scheme:

• Do I need access to my money at any time?
• Am I prepared to take a risk with my money?
• Have I used my annual ISA allowance for tax-free savings?

To help get you on the right track for a good deal click on the link for some of the best current offers for each type of account: