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Key considerations for maximising Your Savings

  • By Malcolm Anderson
  • Published 05/3/2012

Maximising the potential of growing your savings is an important goal, relevant for ‘big ticket’ expenses such as planning a wedding, growing a university fund for your children, buying that dream car or even having an unforgettable holiday getaway. The following guide will explore some of the best ways to make the most of your savings.

Budget for Regular Deposits

A great way to get your savings on track is to calculate a budget and discipline yourself at making regular contributions, such as a fixed proportion of your salary. Through making small changes like packing your lunch from home a few times a week instead of buying it every day, you will find you have that little bit of extra money to squirrel away, and it can soon add up.

Pay Off Debts

It will be very difficult to grow your savings if you’re already paying hefty interest rates on existing debts. So, the first thing you should do before you ‘get serious’ about saving is to clear as much as possible of any outstanding debts, because the rates you pay on your debts are likely to exceed the interest you will earn on savings accounts.

Tax on Savings Accounts versus ISAs

The income you earn on most savings accounts is taxable, so a smart way to protect your hard earned money from the tax man is via an ISA. Whether you opt for a Cash ISA or a Stocks and Shares ISA, you will benefit from the tax efficient ISA allowance. Please do remember, the eligibility to invest in an ISA will depend on your individual circumstances, and all tax rules may change in the future.

Choosing the Most Suitable Savings Account – and online may be best

While some people are still dubious about internet safety, the fact is that you will generally get the best savings account rates from online banks, plus these days most have excellent security features for safe internet banking. What’s more, banking online is highly convenient – you will be able to perform vital functions from home or on the move such as checking balances, making payments and transferring money.

Nevertheless, everyone has their own preferences – if you’re the kind of person who likes to go down to a bank branch, then having a local option with suitable opening hours will obviously be an important criteria for the savings account you choose.

Running Your Savings Account Effectively

Bear this advice in mind when choosing and running a savings account:

The Fine Print

It’s important that you fully understand the implications of the account, including its fine print. Some accounts for example have subtle conditions, such as a reduced interest rate if you make more than three withdrawals per year. Other savings accounts may offer excellent rates, but these might only be available if you meet certain criteria or they could carry heavy penalty fees for accessing your cash. In addition, some may carry an introductory bonus, which when expires and could turn to a very average place to hold your savings.

Long Term Saving

While most savings accounts offer a certain amount of flexibility for accessing your cash, the longer you let a bank or building society hold onto your money, the more interest you’re likely to get. Thus it’s always best to save over the longer term.

Loyalty Is Not Always Best When Banking

Traditionally we have been taught that it is admirable to stay with the same provider if they give you a good service – however this might mean you’re losing out on the best savings account deals. Because the financial marketplace is so competitive, there is a wealth of offers available to choose from. Thus, if you want to make the most of your savings, keep a constant eye on new deals that could offer you better interest rates.


The good news is that here in Britain; there is a lot of consumer protection to hand. This includes a Banking Code which makes it mandatory for banks and building societies to offer a fair service and provide clear information. We also have the Financial Services Authority (FSA) watchdog which has the power to fine any bank that doesn’t treat customers fairly.

About the Author: Malcolm Anderson is an independent journalist with an interest in investment trusts.



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