There are many savings products out there to choose from, but which one is right for you?  This article gives you a better idea of what is on the market and shows 5 quick tips to help decide where to place your retirement savings.

It's a good idea to develop a little nest egg for yourself so that you have money to fall back on in the case that your job is lost, you become ill, or you just want more money for retirement.

Whatever the reason, there is a wide array of savings products to suit your needs based on how risky you are, how often you need to access your money, and how long you intend on saving. What we're going to do is take a look at the different types of savings products that are available to you.

National Savings and Investments

National Savings and Investments are government-backed plans that are probably the safest options for your cash. Unfortunately, a lump sum investment is usually required for the best products within National Savings and Investments accounts, but it is possible for investors to buy premium bonds month by month.

The minimum monthly investment is £50. All of the bonds are worth £1 each and they are placed within a prize draw every month with the chance that a jackpot between £50 and £1 million will be won. Your initial capital is not at risk and the bonds can be redeemed whenever you want to with the prize money being paid tax-free. Many investors like the prize draw, but the average return annually is only around 3.6%.

Regular savings account

Most building societies and banks offer you high-interest accounts, but what you will find are often very strict terms and conditions. These strict terms and conditions can include such things as restricted withdrawals and a specified minimum monthly contribution, so not all savers find this to be in their best interest.

Some building societies and banks may require that the saver pay somewhere between £10 and £250 per month without closing the account or making any withdrawals within a twelve month period.  This is mainly because the building society or bank may be paying a certain gross percentage for a year of saving. An example of this gross percentage is a building society or bank that pays a 7.5% gross for the twelve month period.

Sometimes, the lower the monthly contributions, the lower the amount of total interest you will earn in a year because it is restricted. That is why such savings plans may not be idea for those who need to access their money frequently, but can be ideal for those who may be saving for the following year's expenses.

Tax-efficient savings

Tax-efficient savings are actually tax exempt. Such ways to do that is to put cash within a cash Isa, which is tax-exempt. A saver can put away £3,000 per year or £250 per month and this is done completely tax-free, but the interest rates can vary from provider to provider, so it is a good idea to shop around. 

Aside from a cash Isa, you can choose an equity-based mini Isa that will allow you to save up to £4,000 each tax year. You can also choose to have a maxi equity Isa that will allow you to save up to £7,000 each tax year. Then you have Friendly Society Savings Plans that are tax-exempt as well. In a Friendly Society Savings Plan, savers deposit £25 per month or £270 per year. The money will most certainly grow, but the investment must be ongoing for ten years.

With-profits plans

Life insurance companies will offer what is called a with-profits savings plans. This way is recommended to those who are looking for higher returns on the money they have invested. These funds are usually invested in certain assets such as gilts, bonds, and equities. What the insurance company will do is hold back some of the profits in order to give a bit of a boost to those years in which performance is not very good. The truth is that lately these plans have not been doing well. The overall performance has been poor, so advisors are divided on these plans.

Is that all?

No, that isn't all of the options that are available to you. There are a wide range of savings options available, so these are just a few of a large pool of savings products that you can shop for. At least you can get a better idea of what is available to you and how it can benefit you based on your needs.

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