Get to grips with savings

How to start saving money

To apply you must be 16+ and hold a NatWest current account. Our App is available to personal customers aged 11+ using compatible iOS and Android devices. You'll need a UK or international phone number in specific countries.

What are savings?

Savings is the money left over after necessary expenses, or an unexpected windfall. You can choose from many different places to put your savings, for example: bank savings accounts, ISAs, or invest it.

The different types of savings accounts NatWest has are called: Digital Regular Saver, Flexible Saver, First Saver, Fixed Rate ISA, and Cash ISA.

Why bother saving money?

Have an emergency fund.

Be more financially independent.

Set up a nest egg for your future self.

Save for a goal, like a holiday.

Juggle the jargon on savings accounts

Here's a quick look at some of the terms you'll see a lot when it comes to savings.

What is interest?

This is what you earn for saving money in your account and is shown as a percentage (%) of your balance. For example: if an account gives 2% interest over a calendar year, then £100 in savings would earn £2 per that year. 

What's fixed term?

Fixed term accounts let you put money into them for a set amount of time e.g. 1, 2, or 5 years. It usually has a higher interest rate than instant access accounts although you’ll be charged for withdrawing money before the term has ended.

What's instant access?

This type of savings account lets you instantly withdraw money without a charge.

What's AER?

Annual Equivalent Rate is the interest rate earned for a year if you don’t touch the balance. It accounts for how often interest is paid and any compounding effect if interest is paid more than once during that year.

What's gross p.a.?

Gross per annum is the total amount earned in a year before any charges, for example bank fees or taxes, are deducted from the balance.

What's tax-free p.a.?

Tax-free per annum is the total income someone can earn from savings or investments that won’t be taxed.

How to start saving

1. Understand your spending

Track the money you have against what you spend each month – this’ll really help you understand what’s going on with your money. Our app's Spending and Budget Tracker can help you track your spend in various categories.

2. Put together a budget

Put together a budget that includes everything you spend and include an amount for saving in it. Our Budget Calculator can help you do this, and our app’s Spending and Budget Tracker should help you stay on track.

3. Make adjustments

Spending more money than you have, or feel you want to stop buying small luxuries for a bit? Great, adjust your budget and try your best to stick to it.

4. Got debt?

Consider the debt you have and how much money you can afford to save. Update your budget so you can focus on that goal.

5. Set a goal

Knowing what you’re working to can really help you stay on track. Our app’s Savings Goal Tool can help you work out how long and how much it’ll take to reach your goal.

6.  Automate your savings

Out of sight, out of mind: make things easier by putting away your savings instantly. Set up a standing order to save your money and consider turning on Round Ups to squirrel away the spare change. Eligibility criteria apply.

How much should you save?

This is entirely up to you, your circumstances and goals. You may have some debt you want to focus on paying off for now. Or you might want to pay off some debt each month and build up your savings at the same time.

Figure out what your main goal is and set about creating a plan to get you there.

An emergency fund and a nest egg could help prepare you for anything life has to throw at you while also helping you be more financially independent.

Do you pay tax on savings and interest?

Most people will only pay tax on savings if they earn more than £1,000 annually in interest. You also won't pay any tax on interest earned in an Individual Savings Account (ISAs).

It’s a good idea to check exactly what Government guidance is on this though so you don’t get a nasty surprise if something suddenly changes.

Why a savings account?

Savings accounts are a great way to keep your money separate from the current account your bills are paid from and letting that money earn some interest.

Savings accounts are predictable, dependable, easy to access and protected by the Financial Services Compensation Scheme (FSCS).

Savings accounts are protected

Balances up to £85,000 in any NatWest savings account, current account and cash ISA are covered by the FSCS.

Investments, which we chat about below, are only protected under certain circumstances. The FSCS won’t compensate you if your investments don’t perform as well as you hoped.

Should you save or invest?

Investing is when you buy assets that could increase (appreciate) in value over time. These vary from tangible assets like houses or jewellery, to financial ones like shares in companies or government/company bonds.

Investing could be right for you if you have:

  • long-term goals,
  • can lock away money for 5+ years,
  • no large debts.

If you can't put money away for 5+ years and/or need instant access to money, then a savings account may be best for you. 

Head over to the NatWest Invest hub to get the lowdown on everything investing and decide if it’s right for you.

Visit NatWest Invest

Visit our blog for more info on saving vs investing

The value of investments can fall as well as rise, and you may not get back the full amount you invest. Eligibility criteria, fees and charges apply.

Do savings affect benefits?

Some benefits could be affected by savings or investments. It's best to have a read of which benefits are impacted and how.

Where next?

See and compare all our savings accounts.

We've got some top tips if you're saving for something in particular.