From generating funds to put down a deposit on a home, building up a retirement pot or making provisions in case the worst should happen, seeking out the best savings accounts could prove to be an effective way to boost the amount of money people are able to set aside.
Although there are a number of factors consumers may wish to take into consideration when searching for a vehicle to place their money in, those interested in maximising their returns are likely to be after one which comes with the best savings rates attached to it. In taking out such a product – whether interest is accrued on a variable basis or via a fixed rate of return – savers should be able to increase their investments with some speed.
Choosing the best place to save
After making the decision to seek out the best savings rates, consumers will find that there are a variety of ways in which they can prepare for their financial future. One type of account people may want to consider opening is a regular saver account. Here, a pre-determined amount of money is placed into the savings vehicle each month, something that could be particularly useful for people saving with a specific purpose in mind.
Those on the search for the best saving accounts may find that a fixed-rate bond helps them to access some of the most competitive accounts on the market. Here, money is invested into an account that offers a pre-determined rate of return for a period that can last for just a few months to as long as five years. However, money cannot be withdrawn from the account until the deal’s expiry.
People who are keen to source some of the best interest rates on savings yet want to be able to get their hands on their money at short notice may instead wish to opt for an instant-access savings account. Such a product could prove especially effective for those saving for a rainy day in case of financial emergencies such as being hit with a household bill that is more expensive than previously anticipated or facing a loss of income due to illness or redundancy.
Savers particularly keen on making the most of their investments might want to consider the benefits offered with individual savings accounts (Isas). This type of account gives people the chance to save money without a portion of their returns being deducted for tax purposes – a luxury not afforded to the previously discussed accounts. As such, saving the maximum amount – which for those under the age of 50 currently stands at £3,600 per tax year for either a cash or shares-linked Isa or £7,200 for an account combining both shares and cash-based savings – could see people generate significant sums on their savings.
The benefits of saving
Ultimately, choosing where to invest money – whether it is in just one of the products mentioned above or across a number of them – is a matter of personal choice. With competitive saving rates available across all of them, savers should – regardless of where they place their cash – find they are able to generate attractive returns on investment.
Seeking out the best saving accounts could help people meet a number of financial goals, from increasing the amount that can be saved into a pension pot to helping to boost money with which to finance a major purchase such as a car or a holiday of a lifetime.
Obtaining a competitive savings account could also be beneficial for people looking to take their first steps on the property ladder. As would-be first-time buyers attempt to set as much cash aside as possible to generate a deposit, placing money into an account which offers best interest rates on savings could help them to significantly increase the size of their downpayment. And with a more substantial deposit in hand, consumers could find their chances of getting their dream home are boosted. Furthermore, taking advantage of competitive saving rates to supplement a deposit may mean that a lower loan-to-value mortgage is required, potentially shortening the length of time over which home loan repayments will need to be made.
And although the Bank of England’s monetary policy committee has set the base rate of interest at an all-time record low in recent months, seeking out the best savings interest rates is perhaps more important than ever for consumers wanting their money to work as hard as possible for them. However, there may be other areas those seeking saving products with competitive returns might want to take into consideration.
Not only might they want to think about if there are any restrictions as to how much and how often money can be withdrawn, people may also want to consider by what means their savings can be managed. For example, whether a product can be managed online, over the telephone or in a bank branch may also be a key issue for those looking to make the most of their money.
Taking such areas into account – in addition to obtaining the best savings rates – could soon see savers generate significant returns on their money with a product suitable to their specific circumstances.
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