Does my savings strategy make sense?

09 September 2022

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Question by Adeola


I have a question around savings.

Currently, I have a premium bonds account, a fixed term account, a everyday savers account (with a veryyy low interest rate) and a instant access savings account (for emergencies).

For the future, I aim to use the fixed term and premium bonds savings for a future deposit. Everyday savers for extra cash if I run out and I try my best not to touch the emergency funds.

1) Does my current strategy make sense?
2) By concept, what is the purpose of having a general savings account? I feel like I just use it for extra cash
3) When thinking about saving up for a short/medium term goal, does it make sense to open a separate account for that? For example, saving up for a holiday? And if I need extra cash when the holiday comes around, is it ideal to use my monthly income towards that rather than my general savings?

Also, I feel like if I’m splitting up my savings so much, this will slow down my goal for my deposit but I still want to enjoy life haha.

I’m still quite new to having a strategy so your help is definitely needed!

Thank you in advance!


Answered by Boring Money

Hi Adeola,

It is great that you are getting into the savings habit.

An instant access account for emergencies is a sensible approach.

With regards to your deposit, I assume you mean to purchase a property? If so, what is your time frame? If it is less than five years, then higher interest accounts are the best option. If it is in more than five years then you may want to consider investing. Saving will provide money for short term goals, but will never be able to provide the high returns that you can get from investing.

With savings, do not worry about splitting up into little pots. This is a nice way to achieve the smaller goals that you have.

Some accounts will have a minimum amount so do watch out for this.

I hope it helps!

Joshua Gerstler
Chartered Financial Planner

Answered by

Boring Money