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> Post Office Savings Account - UK Guide
 In a nutshell
A savings account that is held with the Post Office and that is managed via National Savings and Investments (a financial institution that was set up by and that is backed by the government).
Best Saving Account For
You can open all kinds of accounts at your local Post Office so the chances are that most consumers could find a product to suit them. These accounts have traditionally been opened by consumers looking for secure investments.
Expected Return
As with any savings account, you'll probably get the lowest rates of return for instant access and the highest for notice or term accounts with the Post Office. You can also access tax free accounts here such as Cash ISAs and Index Linked products which may give you higher returns than if you had to pay tax on your savings interest. If you buy Premium bonds with your savings you have no guarantee that you'll see any return at all, although you could potentially win up to £1million tax free.
Access
Your access will vary from account to account with Post Office savings. You can currently open instant access accounts or tie up your money for longer periods with bond accounts, for example. If you try to access some longer term accounts before they are finished then you may well be charged penalties for early withdrawals.
How often interest is paid
In general terms, you'll be able to open accounts with monthly interest, annual interest or interest set to be paid at certain times (i.e. when a term product is finished).
Advantages
The government involvement with Post Office savings gives you complete security for your money. The fact that you can manage your account via your local Post office also makes it an easy process in general. And, the Post Office currently offers a wide range of savings products - so the majority of consumers could find one to suit them here. There is a wide range of tax free options with Post Office savings as well. For example, you can take out a standard cash ISA, buy Index Linked Savings certificates or even gamble for a tax free million on premium bonds.
What to look out for
The main drawback with Post Office savings accounts is the interest rates - they may be better than they were but they aren't the best in the savings sector. So, you may want to weigh up the security you'll get and see if the return you'll get on your savings is worth it. In fact many Post Office savings accounts, even the tax free ones, will really only suit high band tax payers as some rates can be relatively low. And, to access the better rates here, you'll potentially be expected to tie up your savings for a few years. Premium bonds could potentially show a good return if you win but you have no guarantee that you will win anything at all. Your savings will be secure with Premium Bonds but whether they earn you anything is a gamble - basically it is those consumers with high investments in this product that do best. If you have minimal savings then you may not see any return at all.
Alternatives
You may want to look at comparable standard savings accounts to see how the rates compare.
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