The best place for your nest egg

John Fitzsimons rounds up the best places to put your savings nest egg.

If the last couple of years have taught us one thing, it's the importance of having a financial safety net. Unemployment has rocketed up to three million, and while the Government has taken steps to ensure you can get financial help quicker should you get laid off, the fact remains that for most of us we would need to tap into savings to get by.

It's one thing to bluff it if you only have yourself to worry about, but if you have kids as well then it seems plain reckless not to have at least some cash set aside for emergencies.

Prepare to be shocked

All of which made the results of a survey from Abbey even more shocking. Research by the bank found that one in four parents (28%) have no savings or investments. Nothing at all - not a penny in savings. Now I know that raising a child is an expensive game, but that strikes me as madness.

Time to get into the savings habit

It's not always that easy to get into a decent savings routine, but there are steps you can take to get started.

A good first step is to sit down and work out your incomings and outgoings each month. I know it's veryboring, but it really does help to give you a bit of perspective on where your money is going each month, and where you can make some changes.

If you are trying to get into the savings habit, then I can't emphasise enough how good the tips in our Build up your savings goal are. Give them a try, and you'll be starting to put together a decent nest egg in no time.

The best accounts

Of course, it's one thing to get into the routine of putting some money aside each month, but just as important is putting that money in the right place to get a decent return out of it.

So where are the best places to put aside a little bit of cash each month to build a decent sized nest egg? I'm going to be working on the basis that you can only afford to put aside £50 each month - so where should that cash be going?

Locking the money away!

Inevitably, the best way to get a decent return on your money is to wave goodbye to it for at least a year in a term or bond account. So it's no surprise some of the accounts paying the highest rates of interest on your money fall into this category, Let's take a look at the top accounts.

What's clear is that with each of these accounts, you have a few hoops to jump through before you can access them. If you already happen to qualify for these accounts, then great, but is it really worth opening a new current account just to get hold of them?

I'm not so sure.

A good alternative to these accounts, if you are just trying to improve the size of your savings, is the Norwich & Peterborough Family Regular Saver.

This account is only available to people with dependent children aged 16 or under (or 18 if they are in full time education), and pays a fixed rate of 5% for the first year. However, withdrawals are not permitted in that first year, so you will still be waving goodbye to your money.

I want my money - now!

Of course, for most of us that money we put aside each month should be there as an emergency safety net, in which case it helps if we can get our hands on it with the minimum of fuss.

So if you want to set up an easy access savings account, where's the best place to go? Below I've put together the top five accounts to consider.

No surprise that the rates are markedly lower than those on offer from term or bond accounts, but I reckon these sorts of accounts are far more practical, at least initially, if you are trying to put together a savings pot.

The current account option

Now, if you are a bit sneaky with it, it is possible to get 6% on your easy access savings, as my colleague Christina Jordan explains in Earn 6% on your easy-access savings. So if you fancy taking advantage of accounts like the Alliance & Leicester Premier Direct current account, and getting a decent return on your savings, then why not follow her tips. You can earn 6% a year and you'll get instant access to your cash.

Be aware though that a bit of effort is required!

If that all sounds a bit of a pain, then I really like the Halifax Reward current account. So long as you pay in £1000 a month, you get £5 each month, irrespective of your balance at the end of the month, which strikes me as a very decent return - £60 over the space of a year.

Time for an ISA

The final option to consider is an ISA which allows regular payments. An ISA is easily the most tax efficient way of saving, so any interest you earn will happily be free of the Government's clutches! You're allowed to save up to £3,600 in a cash ISA this tax year, or £5,100 if you'll be over 50 by 6th April 2010.

One product I particularly like is the First Direct cash e-ISA, which pays 3% on your money and allows regular payments into it. But before you even think about opening an ISA, be sure to read the Top 10 ISA Myths.

Start saving now!

If you need a helping hand getting into the savings habit, there's loads of ways lovemoney.com can help.

First of all, why not sign up to this goal: Build up your savings and follow its marvellous tips. You can even share a few of your own!

Next, have a watch of this video: How to - Save for your child's future

And finally, if you have any questions that need answering about the best ways to get into a regular savings habit, then why not head over to Q&A and pick the brains of your fellow lovemoney.com readers.

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