Money saving ideas

The Money is in the details.

Before you invest your savings with anyone, you need to assess your personal needs. Make sure you read all the terms and conditions associated with the type of account you have chosen. For example it is of no use investing in a high rate fixed term account if you need instant access to your savings at a moment’s notice.

In general it is best to understand that, the more access you need to your savings account, the lower the rate of interest you will receive, however the longer you are willing to commit your savings for you will receive a better rate of interest.

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Not everything is created equal.

One really important thing to note is that not all savings accounts are worth investing in. Always be mindful of the current rate of inflation. If the savings account you have chosen offers a lower rate of interest than the rate of inflation, it is not really a savings account, it is a losing account. If your savings account interest rate doesn’t keep up with inflation, you would seriously be better off putting your money in a locked tin under the bed.

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The government, your friend?

One of the best money saving ideas   if it is available to you is in a tax free savings account. These accounts work in a way that you can invest a set amount of money per year and earn interest on your money tax free. The downside is that these cannot be held in joint names, and the amount you can invest is strictly limited.Sometimes too, the penalties for withdrawing money from the account far outweigh the benefits provided by the interest received.

Money Saving IdeasWhen you are looking around for a savings account, check with your current financial banking provider. Do they offer better rates for their preferred customers? Is there a product they offer that would best suit your needs?

Take a look at some of the smaller financial institutions, sometimes they are able to offer better savings rates as they are not accountable to shareholders who expect to receive a dividend on the profits.

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Should you consider Government Bonds?

All governments offer individuals the option of buying bonds, these bonds are a way for the government to raise extra revenue that they cannot raise through taxes. Basically the government is exchanging your money for an I.O.U. Most bonds are fixed term and fixed price. For however long you agree to hold the bond, you are paid a fixed fee per year until the bond term is reached which is when you receive the original investment amount back.

Government bond terms usually tie your investment up for between 3 and 5 years. If you require instant access to your savings, buying bonds is not a recommended option.

If you have a large amount of capital to invest always make sure that your investment is covered by a guarantee, if your chosen savings provider only guarantees the safe return of ”X” amount, never invest more than “X” with them. History shows that banks and investment companies do go bust.

Have a look at our saving money tips for more ways to save.

The money saving ideas we have mentioned are more suited to those who are looking for secure ways to invest their savings.