Savings Rates - Top 10 Tips For Finding the Best Savings Rate
More and more people are reducing their spending and choosing, instead, to save or invest the money they earn. Find the best savings rate available to you and the money you put away will go a lot further. Here are the top ten tips for finding the best savings rates.
1) Fill up your ISA allowance
ISA is an acronym for Individual Savings Account. ISAs are savings accounts which are available to people in the UK. They have special tax benefits and each person can invest up to £3,600 a year, with all interest received being tax free.
An ISA is definitely a safe bet for your savings if you have less than the upper limit to invest. If you have more, it's a good idea to fill up your ISA before looking elsewhere for good deals.
2) Compare savings deals
Shop around for a savings account which gives you the best savings rate available. By comparing deals across a number of different providers you could end up with a radically improved return on your investment.
3) Use introductory offers
Banks often create deals with higher interest savings rates, usually just for the first year, to encourage new customers. These deals can be a good short-term option as long as you take a careful note of the date when the introductory savings rate finishes and move your cash from the account when that happens.
4) Make sure your money is safe
The government guarantees all savings up to £50,000 (the FSA increased the limit from £35,000 to £50,000 in October 2008). With savings above £50,000, though, there is a risk that you could lose money if your provider runs into trouble. If you are a looking to invest more than the £50,000 limit, it is wise to spread your money around so as to remove this danger.
5) Consider a fixed-rate account
If you are unlikely to want to use your cash over the next two or three years, a fixed-rate account could be an excellent place to put your money for a good return on your investment. However, you need to take into account the possibility for interest rates to rise and other savings rates to improve before entering into a long-term deal, as removing your money early will usually mean paying a penalty.
6) Look at high interest current accounts
If you are keeping your money in a current account, and feel that is the most convenient way to save, it is important to investigate whether there is a high interest current account which is offering a better savings rate than the current account you are using.
7) Don't be loyal to one provider
You may feel more comfortable staying with the same provider, but if their savings rates are not good you may be throwing away good money by doing so. Always shop around for the best deal.
8) Check out regular savings accounts
Look into regular savings accounts where you can gradually build up your investment over time. These accounts give improved returns when you drip-feed money regularly, and are ideal if you're just beginning to save.
9) Visit your local building society
Smaller building societies will sometimes be offering the most competitive savings rates of all, and these deals can't necessarily be found online. You can usually call or visit to find out what they are offering in terms of interest rates.
10) Keep checking
Once you have chosen an account, make sure you keep your eyes open when it comes to savings rates. Unless you have a fixed rate account, you need to keep checking you are receiving a good return on your investment. You should also stay on the lookout for new deals which improve on your current savings account.
