Preparing for a rainy day with savings

Running a guest house can be incredibly rewarding, but it also has its pitfalls. Low season can be difficult at the best of times, but a washed-out summer or damage caused by a careless guest can cause all sorts of unforeseen problems.

Having a little spare capital put away for such rainy days will certainly come in handy. Where to save, or how to best invest one's money can be as treacherous as inviting strangers to stay in one's home. Investigating a variety of savings accounts is therefore a good idea to start with.

Although the ordinary run of the mill options usually offer slightly better interest rates than a current account, they rarely promise really good returns. The best solutions for many individuals are represented by ISAs.

There are a range of opportunities here from instant cash access to long term investments. Even the instant access variations, the better options if funds are to be withdrawn as and when required, offer some very good interest rates.

Some of these opportunities carry so-called bonus rates which will drop to a lower standard rate after a pre-determined period, often a year. If moving funds after this period is not an option, they should be avoided to prevent disappointment.

The best rates are offered by fixed rate individual savings accounts, which are available in terms from 12 months upwards. Here, slightly higher minimum investments are usually required and most of them will not allow the withdrawal of part or all of the funds until terms have matured.

If access is required, it is important to look out for those choices that will allow it. It should be noted, though, that most of them will charge penalties for early withdrawals.

The highest AERs are offered by the long-term variations, where minimum requirements vary tremendously and withdrawals are rarely permitted.

While these are among the most profitable, best savings accounts currently on the market, locking funds away completely for prolonged periods of time may not be an option. Careful comparison of what is on offer will help to make informed decisions.