Making the most of your savings account

The term ‘rate tart’ was coined in recent times to describe someone who hops from mortgage deal to mortgage deal, trying to find the best interest rates but it can be equally applied to savings account customers.  After all, rates don’t stay fresh forever and a once great deal can quickly turn into a very uncompetitive one that is not earning you half as much money as it could.

It’s difficult to find the time – not to mention the inclination – to trawl through all the different savings accounts on the the market in order to find the best one for you.  But these days there is help to be had in the comfort of your own home: online and in the national press.

Many experts recommend that you get yourself an ISA - that’s Individual Savings Account. You can fill your boots with the £3,600 maximum that you are allowed to put in the cash elment each year and benefit from the tax-free interest. You may have more than that to invest per year in which case you can look for an additional investment, but it can often makes sense to take advantage of a cash ISA as a starting point.

Another thing to note is that with increased competition in the market, you may be able to snap up a more flexible account with a great interest rate attached – e.g. you might not necessarily be penalised with a low rate for having an instant access account. 

Whatever the account you opt for, don’t assume that because an instant access account, for example, seems flexible, convenient and friendly that its small print follows suit.  Make sure that you always know the terms and conditions of the account before you opt for it.

And just to return to mortgages: one thing worth bearing in mind is the offset mortgage, which is only really of benefit for those with substantial savings.  With an offset mortgage, your savings pay off the mortgage.  For eg, your mortgage is £100,000 and you have £25,000 in savings, so you only pay interest on the difference of £75,000.  As with a traditional mortgage, you still pay the mortgage lender each month but your savings work as an overpayment.   To check out today’s top best buy offset mortgages, click here.

So make sure that your savings account is working as hard for you as you work to earn the money to put into it.  Of course, if you have a little extra cash to spare and want a little more for your money then you can always consider other investments.  You don’t have to be an expert or take huge risks.

Why not sign up for our mailing list to be notified when our best buy products become available?  Or fill out our enquiry form?  We can put you in touch with one of our carefully selected partners who can advise you in the areas in which you have expressed an interest.  

Useful links
HM Treasury
Her Majesty’s Treasury: read about the Budget, the Treasury’s financial and economic policies, public spending and services, and the UK economy. 
http://www.hm-treasury.gov.uk/

The Finance and Leasing Association
The industry body for the asset finance, consumer finance and motor finance sectors
http://www.fla.org.uk/fla/

National Savings and Investments (NS&I)
The UK state-owned savings bank
http://www.nsandi.com/