Saving for "a rainy day" is a sensible approach to managing personal finances, but it's not exactly a happy one - not when people keep reminding you that there are X shopping days left to Christmas.

And with interest rates so low at the moment, it could be argued that where people choose to deposit their cash is much of a muchness.

Where small amounts of money are involved, consumers won't want to risk investing in products linked to the stock market, despite the fact that they promise much greater returns.

Many people will simply be searching for a second home for their money that is separate from their current account and, therefore, not readily accessible through a piece of plastic.

So what should people be looking for? First, consumers have to decide whether they need a regular instalment or lump sum account.

After that, the three most important features of any savings product are a competitive interest rate, flexible access to money and the savings' term.

Beyond the mainstream banks, more competitive rates of interest can be found at financial institutions such as Anglo Irish Bank and Northern Rock. Up-to-date deposit rates are published on The Irish Times personal finance pages every week.

Meanwhile, a number of other options are also available to savers.

First Active Elevator Account

The Elevator Account is based on the idea that the fixed rate of interest offered increases for each year the customer keeps their savings in the account. The minimum investment is €5,000.

Interest is calculated every six months, meaning it makes sense to withdraw immediately after the six-monthly anniversaries of the product. The minimum withdrawal permitted is €1,000.

Currently, the gross annual interest rate starts at 2.75 per cent in year one and rises to 5 per cent in year five. This gives a gross cumulative interest rate of 19.25 per cent.

This issue of the savings product closes today, so savers will have to wait and see what the terms of the next version are before weighing up the pros and cons.

However, on the current terms, a rate of 2.75 in the first year compares favourably to the most competitive rate on straightforward deposit accounts - the 2.3 per cent available on balances of €2,000 or more at Anglo Irish Bank's seven-day notice account.

Permanent TSB Save 2 Buy

Financial institutions often make suggestions on what customers could/should be saving for. Permanent TSB has plumped for property on its Save 2 Buy account, which might also be called Save 2 Borrow.

The bank says that "a special savings rate" will help customers get the deposit to buy their first home "that much sooner".

The interest rate on all balances is 1 per cent, which is 1 per cent more than what is available on the majority of current accounts, but scarcely noticeable to buyers chasing a five-figure deposit.

What will make a difference to first-time buyers is the 0.5 per cent discount on top of Permanent TSB's discounted mortgage rate for new business, currently 2.69 per cent. This would give a first-year interest rate of 2.19 per cent.

To get this rate, plus a range of other discounts, Save 2 Buy customers need to make at least 16 monthly contributions of €150 or more over 18 months.

The maximum that can be placed in the account is €25,000. Savers can make up to two withdrawals, subject to a maximum of 10 per cent of the total.

After the first year, the main advantage of the product disappears as the mortgage rate reverts to Permanent TSB's standard rates.

Credit unions

Irish people have placed savings more than €9 billion in the hands of credit unions, according to the Irish League of Credit Unions.

Each €1 placed in a credit union account represents one share in the credit union and gives the member one vote in any decisions affecting the credit union.

If the credit union declares a dividend at the end of its financial year, each share held is eligible for a dividend. The rate of dividend can vary from credit union to credit union.

Savings are used to make loans to members. To be approved for their first loan with a particular credit union, members are often required to build up some savings first.

An Post

The local post office has often been the first stop for many people's savings and, with interest rates so poor at most banks and building societies, savers could do a lot worse than stick with tradition.

They could do better too. The cumulative interest rate on money placed in An Post's savings certificates is 16 per cent for a term of five years and six months. On its instalment savings scheme, the rate is 15 per cent over five years from the end of a 12-month contribution period (or an average annual compound rate (CAR) of 2.57 per cent).

This compares to a gross cumulative rate of 19.25 per cent over five years on the First Active Elevator Account.

An Post's instalment savings scheme is designed for smaller savers than First Active's product: the minimum monthly instalment over the 12-month contribution period is €25, while the maximum is €500.

Another crucial difference between An Post and the rest is that its savings products are free of tax, namely Deposit Interest Retention Tax (DIRT), which is charged at the standard rate of 20 per cent on gains.

Special Term Accounts

These are lump sum savings accounts available from AIB and Bank of Ireland for people who don't like paying DIRT.

But unlike bogus non-resident accountholders, savers who use special term accounts (STAs) to amass cash won't be getting ominous letters from the Revenue.

STAs were introduced by the Government in 2001 as part of a compromise worked out with credit unions over tax on members' savings.

A maximum of €480 interest per annum can be earned tax free in a three-year STA, while up to €635 per annum interest can be earned tax free on a five-year STA.

AIB has a variable rate on its STA, currently 1.85 per cent and 1.95 per cent for the three- and five-year options respectively.

Bank of Ireland introduced its STA last May with a rate of 2 per cent fixed for the first year on both the three and five-year options. A new rate will be fixed on each anniversary of the account.

Because interest rates can change during the term, it is impossible to predict the exact lump sum a person should put into a special term account at the start in order to earn the maximum amount of tax-free interest allowed.

One potential drawback is that the Revenue does not allow any withdrawals to be made during the term of an STA.

Seeking out competitive rates on notice accounts could prove more flexible and financially rewarding, not to mention healthier for the Exchequer.