The Smart Guide to Savings

Unsure of where to put your savings during the economic crisis? The crash in interest rates has left many of us at a loss as to what to do with that rainy day fund that we worked so hard to build. The usual options – tax free instant access ISAs and fixed term savings accounts  – have all let us down of late, leaving us with some serious creative thinking to do about how to make the most of our hard-earned cash.

Though the situation may seem irremediable at first glance, there are options available. Do not be tempted to leave your money where it is – most likely earning next to nothing in terms of interest – when you could be exploring a number of other options that have recently begun to increase in popularity.

One such possibility is the Corporate Bond. Corporate Bonds are available from a number of banks and building societies and offer a modern twist on the fixed term savings account. The basic premise of a Corporate Bond is that instead of placing your money in the hands of your bank or building society – which is essentially what you do, of course, whenever you open any kind of account – you place it with a range of companies and trust them to invest it for you. Your money is still subject to a fixed rate of interest. (Note: this does not translate as fixed income.) Take a look at the Legal & General website for further information on corporate bonds.

As Britain slowly begins to emerge from the financial crisis a number of improved savings accounts are starting to appear from a variety of banks and building societies. The only way to keep costs as low as possible in order to give you a better interest rate is to operate these accounts online, incurring minimal handling and maintenance expenses. Instead of investigating your local branch for options, look to their website. You might find that there is an e-savings account available to open online in conjunction with your current account which will offer you a better rate than you would find elsewhere. You will also benefit from the flexibility afforded by online banking.