Savings are the bedrock of most people's finances, and the run on Northern Rock, the collapse of Icesave and concerns over the health of other providers are a sobering reminder that they should not be ignored. Here are our ten tips to be a happy saver.

1. Don't worry unnecessarily

Many experts believe that the £37 billion government bailout of the big high street banks should be enough to prevent another bank going under. If a UK bank or building society were to fail, however, the Financial Services Compensation Scheme (FSCS) protects savers' money up to a limit of £50,000.

2. Avoid putting all your eggs in one basket

Since the run on Northern Rock, savers have been advised to split deposits of more than £50,000 between different institutions.

3. Check who owns whom

The compensation is £50,000 per banking licence, not for each account or brand. Some savings providers that are owned by the same parent bank have their own licences, while others share that licence. For example, if you have money with Abbey, cahoot or Bradford & Bingley - all owned by Santander and registered under Abbey National - your total compensation limit would be £50,000. If you are unsure whether different banks have the same licence, contact the Financial Services Authority on 0845 6061234 or go to www.fsa.gov.uk.

4. Be wary of foreign banks

More than 300,000 British savers ploughed money into banks such as Icesave, owned by Landsbanki, and Kaupthing. These savers were reassured that the banks were safe and had signed up to the appropriate compensation scheme.

But some of these claims proved hollow. Savers with Icesave were told that they would have to rely on a much smaller Icelandic government fund to guarantee their first €20,887 (£16,317) of savings, with the FSCS picking up only the remaining £33,483. When Landsbanki ran into trouble, it became clear that the Icelandic compensation scheme was hopelessly underfunded. The UK Government was forced to guarantee UK deposits in the stricken bank.

5. Switch if you can do better

It is easy to find the best deal. Simply log on to timesonline.co.uk/savings and check out our best-buy tables. Once you have found a new account, don't be put off switching because you think that it will be too much hassle. Simply fill out a form from your new bank and it will transfer any standing orders and direct debits to your new account.

6. Set up an emergency pot

Experts suggest that you should have at least three times your monthly salary squirrelled away for emergencies. It is much better to have a pot of cash to draw on than resort to credit cards or loans, which can prove expensive, especially at short notice.

7. Don't ignore inflation

If the value of your savings does not keep pace with rising prices, its buying power will be eroded. With inflation at 5.2 per cent, basic-rate taxpayers must find savings accounts paying at least 6.5 per cent, which is just about possible. However, there isn't a single savings account paying the 8.63 per cent needed for higher-rate taxpayers to beat inflation.

You could consider index-linked savings certificates from National Savings & Investments, the government-backed savings bank. Returns are tax-free and the certificates pay a set amount above the retail prices index. The three and five-year certificates currently pay the equivalent of 10 per cent on a taxed account, assuming that you are in the higher-rate bracket. For basic-rate taxpayers it is worth 7.5 per cent. But if, as expected, inflation falls, the certificates will not look such a good deal.

8. Don't be duped by short-term bonuses

A number of savings schemes pay short-term bonuses - to lift them into the best-buy tables - only to lower their interest rates later. Capital One Bonus Saver pays 6.5 per cent, but this includes a bonus of one percentage point that runs for only 12 months.

9. Watch out for penalties

Research by Sainsbury's Bank indicates that nearly a quarter of the top 50 easy-access accounts restrict the number of withdrawals that you can make, and 8 per cent charge a penalty for withdrawals.

Alliance & Leicester's eSaver Issue 2 is paying an eye-catching 6.6 per cent before tax, but penalty-free withdrawals from the account are allowed only in July.

10. Do not forget your current account

If your balance is usually in credit, it is worth shopping around for a current account that does not charge fees and that consistently pays a high rate of interest. For example, Alliance & Leicester's Premier Direct account pays 8.19 per cent on balances up to £2,500. There is no interest on authorised overdrafts of up to £2,500 in the first 12 months.