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How to maximise savings
Actively managing your cash savings is the best way to achieve the highest interest rates. It is important to regularly review your savings to ensure you aren’t missing out.
By switching to the highest paying accounts, you could be earning hundreds and even thousands of pounds extra every year compared to high street rates. High street banks tend to pay the worst rates on the market, but there are plenty of new banks entering the market offering more. With this in mind, keeping active has never been more important. Here are some top tips for making your cash work harder.
Tip 1: Stay active with your cash savings
Finding the best savings rates doesn’t have to be a challenge but continuing to earn the best rates can be the hard part. In order to avoid watching the interest you are earning dwindling, it’s important to regularly review and switch when something better is available.
There are currently over 150 banks and building societies on the market and with nearly 1,500 savings accounts to choose from, It’s little wonder that so many of us are guilty of leaving money to languish in poor-paying accounts and not regularly chasing the best deals.
With the amount of competition in the market, its important to shop around for the best rates.
Latest savings rates
Tip 2: Ditch the high street
If you are saving money with a high street bank, you’ll almost definitely be getting a bad deal and even losing money in real terms.
Many leading high street banks pay shocking rates on their so-called savings accounts. Just because you may not have heard of a new bank don't rule them out. Do your research check their website and ensure they are registered with the Financial Services Compensation Scheme (FSCS).
Tip 3: If you don’t need immediate access, don’t choose an easy access account
Many people choose to keep their savings in easy access accounts.
With over £1 trillion in easy access and current accounts, much of which is likely to be earning poor rates of interest or even nothing at all, savers are missing out on millions, if not billions, of extra interest by choosing the wrong account.*
It’s unlikely you’ll need immediate access to all of your cash, so why not put at least some money into better-paying accounts which tie your money in for longer.
Alternative types of accounts may suit savers better depending on their circumstances and could be an easy way to maximise savings. Fixed rate bonds tend to pay more for those happy to lock up their cash, and for higher earners, ISAs provide a haven that prevents you paying tax on any interest earned.
Tip 4: Consider a cash savings platform
If the hassle of opening and switching your savings is just too much for you why not consider using a cash savings platform. Cash Savings Platforms are a savings supermarket where savers can make a single application, then pick and choose which products, from those available at the time, they want to buy.
The real benefit of these platforms is the simplicity as many people are put off having to fill in application forms every time they want to open a savings account. Apply to the platform once, then open as many savings accounts as you'd like from the products available. Platforms take a fee for the service but these will be explained up front .
In summary, the key to keeping your savings working as hard as possible is to stay active – ditch and switch from those providers who are not treating you right.
If you want more advice about keeping active why not speak to a financial adviser who can help you.
*Source: Bank of England