How To Get More From Your Savings
So, you’ve finally decided to start saving some money for the future. Whether you have a specific reason for saving or you just want to put something away, it’s important to consider carefully the particular account that best meets your needs. It might seem easier to open up the first savings account you see, but a little consideration and research could pay dividends in the long-run.
To get it right first time, you need to think about what you are saving for. It could be something very specific, such as a wedding, your offspring starting university, or perhaps a special holiday you have in mind for when you retire. In this case, you will be more prepared to tie the money up for a longer period of time.
This is quite different from just saving for the proverbial rainy day. In this case you simply don’t know when you will need the money - you might save it up for years and never touch it or an unforeseen event could mean that you need access to your cash at short notice. This means you’ll need an account that is more accessible, and one that doesn’t limit you to just one or two withdrawals a year.
Needless to say you will get more interest if you can tie up your money for longer. Be sure that this won’t cause a problem before you agree to such an account though; you can sometimes be required to pay a penalty if you later have to withdraw the money without giving the appropriate notice.
Once you know how flexible you can be, you can start to think about which account to go for and begin to learn what interest rates are available. It’s worth spending some time comparing different offerings and accounts to get the best possible deal – especially if you’re compounding the interest on your accounts (earning interest on the amount of interest you have already earned). This can make a big difference a few years down the line.
Make sure you read the small print to ensure you get the most from your account. For example, if you are considering an ISA account, research the types of account available and do your suns to ensure that you have chosen the right one for your needs. As with any type of savings account, not all of them offer exactly the same service, so you should always check the ISA rates being offered.
Saving a little money for a life event or rainy day is always a good investment. However, a little research could be the key to maximising your money and selecting an account that really suits your financial needs.
To get it right first time, you need to think about what you are saving for. It could be something very specific, such as a wedding, your offspring starting university, or perhaps a special holiday you have in mind for when you retire. In this case, you will be more prepared to tie the money up for a longer period of time.
This is quite different from just saving for the proverbial rainy day. In this case you simply don’t know when you will need the money - you might save it up for years and never touch it or an unforeseen event could mean that you need access to your cash at short notice. This means you’ll need an account that is more accessible, and one that doesn’t limit you to just one or two withdrawals a year.
Needless to say you will get more interest if you can tie up your money for longer. Be sure that this won’t cause a problem before you agree to such an account though; you can sometimes be required to pay a penalty if you later have to withdraw the money without giving the appropriate notice.
Once you know how flexible you can be, you can start to think about which account to go for and begin to learn what interest rates are available. It’s worth spending some time comparing different offerings and accounts to get the best possible deal – especially if you’re compounding the interest on your accounts (earning interest on the amount of interest you have already earned). This can make a big difference a few years down the line.
Make sure you read the small print to ensure you get the most from your account. For example, if you are considering an ISA account, research the types of account available and do your suns to ensure that you have chosen the right one for your needs. As with any type of savings account, not all of them offer exactly the same service, so you should always check the ISA rates being offered.
Saving a little money for a life event or rainy day is always a good investment. However, a little research could be the key to maximising your money and selecting an account that really suits your financial needs.
Victoria Cochrane
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