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During these times of very low interest rates, trying to find a safe place for your money to grow can be a challenge. Other types of investments can be risky, and you might be willing to settle for lower returns in exchange for some security. Fortunately, there are some things you can do to make sure you are getting the best possible rate for the money you are saving, but also for your future needs.
The internet is an excellent tool for comparing various types of savings accounts, and quite a few financial websites offer tools so you can figure out where the best place for your money is. It’s best to look for one that’s independent of any financial institutions so you can be sure you’re getting the most objective advice.
In most cases, you’ll get the best savings rate if you are willing to tie your money up for a while, as with a time deposit. The lowest possible rates are available on those accounts that allow you to withdraw your money at any time. If you set up a time deposit for 3 months to 5 years, you are sure to get a much better rate, especially as the length of time increases. So, if you are saving for something in the future, like a holiday or a wedding, you can put the money away for awhile and earn much better returns.
The amount of money you put into an account will also affect the rate you receive. Many banks have tiers, with the smallest level getting the smallest rate, up to large amounts that get more favorable rates. So, rather than dividing your savings into many accounts, unless you absolutely have to, try to keep them in one account to maximize the benefit of the larger amount.
Savings bonds are another option if you can put your money away for a period of time. These are usually issued by the government and are considered quite safe, and the rate of return is better than a regular savings account. Pay attention to whether the rate is fixed or variable. If rates go up in the future, you want to be able to take advantage of those increases.
If you are willing to take on a bit more risk, you can consider a money market account. These are limited access accounts that usually don’t require any time commitments, although they may restrict your withdrawals. They are usually tied to the stock market and make fairly good returns, although you should be sure to read the fine print to ensure that the bank guarantees the safety of the entire amount.
When looking for the best savings rate, decide how much you can put away, and for how long. Then use one of the many tools on the internet to help you compare accounts at different banks and online financial institutions. If you do your homework, you should be able to find an account that meets your needs, gives you access to your money when you need it, and provides an impressive rate of return.