Providing for future investments

Putting aside some sort of savings to provide for future needs has become more important than ever, both for families and small businesses alike. Deciding where or how to invest one's hard-earned money in order to get the best possible returns, though, is not always easy.

The first question is what type of account to go for. There are a number of alternatives, beginning with the instant access options. These are typically set up with the ability to withdraw funds as and when needed. Within this group, instant cash ISAs are among the type offering the best rates.

Short, medium or long fixed term accounts typically offer excellent rates and are taken out over specific periods of time, during which withdrawals are generally either not possible or subject to penalty fees.

The short term variations normally last for 12 months, have varying minimum deposit requirements and will occasionally allow savers to withdraw funds, although penalties will be applied in way of loss of interest. Minimum amounts to be invested are generally higher and AERs are better than those of instant cash solutions.

So-called medium terms, taken out for up to two years, have similar requirements and limitations, while offering still better interest rates. Anything above three years is classed as a long-term investment, will have the same basic rules and initial deposits are often higher still than the previous options. AERs are usually excellent and will increase with the length of term.

Another good opportunity to gain high interest rates is presented by savings bonds. Available for terms of 12 months, 24 months, three or four years and above, rates again vary according to the selected length of term.

Minimum investments can vary between £1 and £50,000, with many of the bonds also having a maximum input limit. Only a handful of these choices offer the opportunity to take funds out before the end of term, usually at a cost.

The ideal way to determine what will be the best possible solution is to compare savings accounts, their benefits, requirements, etc against personal budget and requirements.