In personal finance, one size doesn’t fit all. However, savvy savers understand that using a range of different savings accounts is key to growing their wealth, keeping their money flexible, and meeting diverse financial goals. This approach is known as the multi-account strategy. 

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Let’s break down how it works and how you can use it to your advantage.

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Why use multiple accounts?

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Each type of savings account offers different perks. By splitting your money across several accounts, you can:

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• Maximise interest: Some accounts offer better rates for certain types of savings.
• Keep your money accessible: Different accounts offer varying levels of access to your funds.
• Meet different savings goals: Whether it’s an emergency fund, retirement savings, or a holiday fund, separate accounts can help keep your financial goals on track.
• Benefit from tax perks: Some accounts offer tax-free savings, giving you more return on your money.
• Reduce risk: Spreading your money across different accounts means you’re less exposed to market changes or poor interest rates in one area.

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How to leverage UK savings accounts

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Now, let’s explore the key UK account types and how to build them into your multi-account strategy:

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1. ISAs (Individual Savings Accounts)

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ISAs allow you to save up to £20,000 a year tax-free. This makes them an essential part of any savings strategy. Max out your ISA allowance if possible to shield more of your savings from tax. 

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2. Instant access accounts:

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Instant access accounts let you withdraw money whenever you need it. While the interest rates are (generally) lower, the liquidity makes them perfect for short-term goals and emergency funds. Try to keep 3-6 months of living expenses here to cover any unexpected costs.

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3. Fixed-term savings accounts

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These accounts offer better interest rates if you’re willing to lock your money away for a set period, typically ranging from one to five years. Use fixed-term accounts for medium- to long-term goals, such as buying a house or a big future purchase.

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4. Prize-linked accounts

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Instead of traditional interest, accounts like the Chip Prize Savings Account offer the chance to win tax-free prizes. Though there’s no guaranteed return, the prospect of winning big can be an exciting addition to your savings.

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Prizes are not cash and are applied to your Chip account as a bonus. Prizes become cash once you withdraw your entire Prize Savings Account balance into your linked bank account.

T&Cs, eligibility criteria and minimum average balance of £100 applies. For current prize values, entry and eligibility criteria and how to opt-out see our full terms”.  FSCS limits of £85,000 apply to eligible deposits. Prizes are not eligible for FSCS protection.” (if mentioning the FSCS scheme).

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Structure your savings

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Here’s how a typical multi-account setup might look:

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• Emergency fund: Instant access account for peace of mind.
• Short-term goals: Cash ISA or high-interest instant access for a holiday or new car.
• Medium-term goals: Fixed-term accounts for savings you don’t need immediately.
• Long-term goals: Stocks & Shares ISA or a Cash ISA for retirement or a future property purchase.
• “Fun” money: Prize-linked accounts for a chance to win big.

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Tailor your strategy

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The multi-account strategy is about building a system that works for your unique financial needs. Whether you’re saving for a rainy day, a dream holiday, or retirement, using multiple accounts lets you optimise every pound.

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Make sure to review your strategy regularly, keeping up with the latest offers and adjusting your approach as your financial situation evolves. With a tailored multi-account system, you’re not just saving – you’re setting yourself up for financial success.

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Note: Chip does not provide financial or tax advice. Tax treatment depends on individual circumstances and may be subject to change in the futureAlways consult a professional for personalised recommendations.

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Prize Savings Account

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T&Cs, eligibility criteria and minimum average balance of £100 applies. FSCS limits of £85,000 apply to eligible deposits. Prizes are not cash and are applied to your Chip account as a bonus. Prizes become cash once you withdraw your entire Prize Savings Account (“PSA”) balance into your linked bank account. Prizes are not eligible for entry calculation or FSCS protection. This account does not offer interest. For current prize values, entry and eligibility criteria and how to opt-out see our full terms.

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The PSA and prize draw are offered and managed by Chip. ClearBank is responsible for only the provision of the account and holding your funds which are FSCS protected (subject to eligibility). ClearBank is also responsible for the provision of the Chip Instant Access Account. This means deposits held across both accounts would be eligible for a total of £85,000 of FSCS protection ONLY.

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Chip Cash ISA

Your Chip Cash ISA is a cash ISA provided by ClearBank Limited. ISA limits apply. Deposit up to £20k per tax year. Chip does not provide tax advice or financial advice. Tax treatment depends on individual circumstances and may be subject to change in the future.

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Savings

Chip is a trading name of Chip Financial Ltd and is authorised by the Financial Conduct Authority under the Payment Services Regulation 2017 for the provision of payment services. Firm Reference Number 911255.

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Investments

Chip Financial (Investments) Ltd is authorised and regulated by the Financial Conduct Authority, under firm reference number 1005114.

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