Money Saving Tips - Finance

Savers Fate's in the Rates

As the credit crunch bites, saving your hard earned cash could be difficult. It could however be that if you put away what you can now then it could help you survive the current hard times. Despite rising costs and high inflation, there has never been a better time to save.
So why is it a boom time to save.

Do you have a losers account? The top savings account pays 6.5 per cent with instant access and a guarantee the rate will stay high, yet many people still stick with their 'losing' account, paying less than inflation after tax.

There are right now better value savings rates on offer. The reason is quite simple: banks are short of money. They don't have enough to lend, now one guaranteed way of raising cash is to bring in more savings.
That means that they have to encourage us to deposit our nest eggs with them. A boom time for savers.

The crucial key to good value is the difference between the amount of interest a savings account pays and the base rate.
For instance if the base rate was five percent and a leading instant access account was paying as much as 6.5 percent, then savers would be benefitting from that 1.5 percent, exceptional!

Where to Start

First of all, do you have any debts? If you do you could find that you would be better off clearing it, especially if it is the case that the debts are carrying a high level of interest.
If you pay tax and your mortgage rate is six percent or over then it really is in your interests to pay it off as quickly as possible.

Do you have a cash ISA?

This is a tax free savings account you can invest up to £3,600 every year in. If you don't have an ISA then it really is the first lace[lace you should be looking to put your saving into because it really is tax free.

Are your Savings Safe?

In most cases savings are protected up to £35,00 per person, per financial institution. If your saving exceed that amount you may wish to consider spreading them across a few different banks.

Consider a Fixed Rate

With fixed rate accounts you get a guaranteed rate of interest for a set period although you may not be able to withdraw your money without being penalized. As such they are only for people happy to lock their money away. You can get some great rates in the fixed rate market.