Emma Simon presents a no-nonsense guide to your money questions…

What should I look for in a current account?

Is Internet banking safe?

What sort of savings account do I need?

When should I start saving for my pension?

When is the best time to take out an Isa?

Should I invest in the stock market?

What should I look for in a current account?
This is one of the most basic financial products, yet few people shop around for the best deal. The majority of people in the UK have a current account with one of the big four - Barclays, HSBC, NatWest or Lloyds TSB - yet these banks charge far higher overdraft rates and pay a lot less interest on credit balances than many of their competitors.

If you regularly go overdrawn you need to pick a bank account with a low overdraft rate. If you manage to stay in the black most months, seek out an account that pays a reasonable rate of interest. Look at the bank accounts from Halifax, Smile, First Direct, Alliance & Leicester and Abbey National, the main competitors to the big four clearing banks.

Also look at how you conduct your banking. Do you regularly use a branch or are you happy banking over the phone or by Internet? Pick a bank account that has services to suit you. If you want face-to-face contact, make sure you bank with a provider who has a local branch.

Is Internet banking safe?
Many people worry about security on the Internet, but it is far safer than handing your credit card over in a restaurant or reading your card details down the phone. That said, no system is completely hacker-proof, so make sure you are dealing with a reputable bank that is registered in the UK. This doesn't guarantee there won't be problems, but if a security lapse does occur, the bank should protect your money.

All UK banks have to sign up to the Financial Ombudsman Service, so if there is a dispute you can take your case to an independent adjudicator. This service is also free.

To check whether a bank, or any other financial company, is registered to conduct business in the UK call the Financial Services Authority on 0845 606 1234.

What sort of savings account do I need?
Any surplus money you have each month should be placed in a savings account, not left in your current account; you will receive a much higher rate of interest. Savings accounts fall into two main categories - those that let you have instant access to your money and those that impose a 'notice' period, which can be anything from four weeks to six months. In the past notice accounts typically paid higher interest rates, but this is no longer the case.

The best-paying savings accounts tend to be Internet-only accounts or cash Isas, both of which are generally instant access. Cash Isas (Individual Savings Accounts) allow you to save tax-free but the maximum you can save in any year is £3,000. Use these as a starting point, and if you can save more, look for other top-paying accounts.

Only opt for a notice account if you already have built up sufficient 'rainy day' funds in an instant access account. Financial advisers recommend you have at least a month's salary in 'emergency savings', preferably three.

What about a pension? When should I start saving and what type should I opt for?
The state pension provides just a basic standard of living so if you are on a moderate wage you want to start building your own pension pot too. The harsh truth is the earlier you start, the more you will accumulate, but realistically most people do not get around to thinking about a pension until they are at least in their 30s.

If you have the opportunity to contribute to a company scheme do so as soon as possible, particularly if your employer is making contributions, or links your pension to your final salary, rather than relying simply on investment growth. If you don't have access to a company scheme then stakeholder pensions are the next best alternative. These are far more flexible than traditional personal pensions (there are no penalties for stopping, starting or changing contributions), and charges are capped at a maximum of one per cent a year.

However, younger people may want to consider saving into an Isa instead. Although the contributions you make do not qualify for tax relief, any interest earned or investment gains are tax-free. And Isas allow you to access your money before retirement age - so can be far more flexible. You can always move these savings into a pension plan at a later stage.

When is the best time to take out an Isa?
People can save a maximum of £7,000 each year into an Isa: £3,000 of this can be placed in a cash Isa - basically a tax-free deposit account, with the remainder going into a stocks and shares Isa. To make use of this allowance you have to take out an Isa before the end of the tax year - which falls at the start of April.

Inevitably most people leave it to the last few weeks of the year to buy an Isa. In the scramble to meet the deadline, many people do not think through what they are buying, or why, and may end up with an unsuitable product. It is far more sensible to buy an Isa earlier in the year - or even take out a regular savings plan which allows you to save a little each month rather than sink a lump sum into the stock market all in one go. Regular savings help smooth out the ups and down of the stock market.

Should I be thinking about equity savings? The stock market seems to be falling so surely it is the wrong time to buy?
Regardless of whether the stock market is rising or falling you should only be thinking of equity investments if you can afford to lock-up your money for at least five years. Stocks and shares are long-term investments. You should only consider them once you have built-up sufficient savings in a cash-based account to cover unexpected emergencies, such as losing your job, getting married, having a baby or long-term sickness.

If you need to cash in a stock market investment suddenly you could find it is worth a lot less than you have paid in. That said, over the long term (five years or more) equity savings typically generate far higher returns than building society accounts, although in the short term returns are far more volatile. So for long-term goals, such as retirement, they are ideal. This is true whether stock markets are rising or falling; indeed many advisers would argue that it is far better to buy after a period of substantial share price falls, than when they have been booming for several years.