Many people associate “saving” with “scrimping” – but is it really necessary to cut out on luxuries to build up your savings? Obviously, avoiding outgoing expenditure is an easy way to guarantee you have some money leftover to put into your funds – but an equally important part of saving is what you actually do with your money once you’ve set it aside.
The olden days of storing wads of £50 notes under the mattress are long gone, as savvy savers know they can take advantage of the huge number of savings products on offer to the general public. With the advent of the internet, it’s easier to compare savings accounts, and switch providers, than ever before.
Simply relying that your current account bank offers you the best long terms savings plan may be a costly mistake – with just an hour’s research, you could save hundreds or thousands by checking interest rates against the competitors. Sometimes there are factors to consider beyond high interest rates, such as easy access, initial deposit requirements or support for additional services like loans; regardless, looking at the market as a whole will help you.
The most efficient products to consider will be online savings accounts and cash ISAs. The latter can be especially high-yielding as these savings will be entirely tax-free for that financial year. However, there are limits on how much you can deposit (currently £5,640 – though with a stocks and shares ISA you can invest up to £11,280), which means if you are planning to invest significant amounts you will have to expand your portfolio.
Taking control of your savings accounts may not be the most entertaining thing you could spend your time doing – but if you think about how much enjoyment you could get out of the money you save, you’ll see how it is easily worth it.