The Covid-19 pandemic has meant that global markets have been affected and interest rates are being cut by banks left, right and centre. If you have savings, they need to be in the best place to give you the best possible return. Are your savings in the best high interest savings account?
Your Savings Are Your Future
The first thing to do it look at your savings as a way of saving towards your future. If you have £5000 in savings and they’re in an account giving you 0.4%, they’re only making £20 a year. Shift them into an account which is 1.6% and you’re making £80 That’s £60 extra just because it’s a different account. Getting your hands on the best high interest savings account you can, puts your money to work and gets you the maximum return on actually having a savings account.
Children’s Savings Accounts
The reason I started looking at different accounts was because of a letter I received from Halifax. A couple of years ago I set up my children with a Halifax childrens savings account which pays 2% interest on up to £2000. It’s a free account and that’s £40 a year the money will make. They also have another account which pays 3% on up to £3000 (£90 a year) but as they have over £3000, there is no point in having that extra sat in the same account. It might as well be in a different account earning 2%, rather than 0%. The letter I got said the interest rate was going to be dropping. It will drop from 2% to 1.45%. That’s £29 a year instead of £40. Whilst it’s still a half decent rate, it’s still a drop.
Where Could I Move Their Money To?
Whilst I’m typing this I have different tabs open showing me the best children’s high interest savings accounts. You can open an account at Barclays and get 3.5% on up to £100 a month for the first year before it drops to 2.02%. This can only be opened instore though and we don’t have a Barclays nearby. HSBC pays 3% on the first £3000, 0.75% on anything after that. That could certainly be an option. The thing is, is Halifax have dropped their rates, other banks will likely follow suit. So it could end up being better to stay where we are.
Easy Access Accounts
I’ve written about the best easy access savings accounts before and it’s still worth making sure your savings are in the best place, giving you the most money. More and more of us are struggling with finances during this global situation, as jobs have been lost and industries have been stopped. Whilst some are getting government support, others aren’t. Making sure your savings are working for you is so important. Whilst a couple of percentage points doesn’t seem like much, it can help put food on the table. Make sure your money is in a high interest savings account.
Are You Able To Lock Away?
Some of us might not be willing to lock our money away for 12 months right now. With the issues already mentioned you might be more comfortable being able to access it should you need to. If you are able to lock away for 12 months or a couple of years you’ll get better interest rates, paying you more. You need to weigh up that risk verses reward and see if it’s for you.
Save For Your Situation
At the end of the day, and these days are long at the moment, you need to save in a way that you are comfortable with. Put your money in the high interest savings account that works for you, whether it’s easy access or locked away. Be sensible with your money and make it work as much as it possibly can for you.
