It's not easy to make your money pay. Interest rates are currently rock bottom and many of the best payers involve sacrifices that are enough to make anyone think twice. Gone are the days where accounts paid generous rates of more than 5% - right now, cash ISAs alone are averaging at 0.74%, according to Savings Champion - that's £7.40 for every £1,000 you save. Thankfully, when it comes to savings, there are options, and many of them. There's investments, easy access, fixed rates, ISAs and that's before you factor in specialist accounts for buying a house, retiring or building a nest egg for a young child. How to choose a savings account Different accounts cater for different needs, and high interest in the current climate is likely to come with a catch, so here are some handy tips and questions to bear in mind to get started. 1. What exactly are you saving for? This is crucial. While in theory, they’re all savings accounts , some are designed to help you reach a … [Read more...] about Our top picks of the best savings accounts to earn the most on your money
Isa best rates
A YOUNG couple from Leicestershire were left with over £5,000 of debts after falling foul of a loop hole which meant they couldn't use the Help To Buy Isa top-up to pay for their house deposit. Laura Hollick, 27, and Jamie Ray, 23, were relying on the £3,000 government top-up on their savings to secure their new-build house but they were never able to claim it. They are one of 45,000 first-time buyers who's house purchase has been delayed because they couldn't use the Help to Buy top up for a house deposit, according to financial services firm OneFamily. When you buy a property there are usually two deposits - one chunk is paid when you exchange contracts and another once the sale is completed. The Help to Buy Isa bonus is only paid once you've paid the first deposit. In Jamie and Laura's case, the building firm wanted the whole deposit up-front and as they'd been relying on the bonus from their Help to Buy Isa for the cash they were left short. Research by OneFamily has … [Read more...] about First-time buyers are getting into debt due Help to Buy Isa bonus catch – here’s how to avoid it
Should banks be forced to offer a minimum savings rate, as the FCA suggests? Andrew Hagger, founder of Moneycomms.co.uk, says YES. The marketing strategy of many banks and building societies is to lure in new customers with a teaser rate, well above that offered to existing loyal savers. Yes, there is the opportunity to switch accounts, however not all savers have internet access, so many elderly and vulnerable customer groups are missing out. The comparison sites love the current “must switch” mindset in the UK, as it drives a healthy revenue stream for them, while savers struggle to find the best rates when their offers end. Chopping interest rates to meet internal cost targets might work for the banks, but it’s a headache for savers trying to keep tabs on their account. The introduction of a minimum savings rate isn’t going to make a massive difference in terms of interest earned, but at least it should help level the playing field between old and new … [Read more...] about DEBATE: Should banks be forced to offer a minimum savings rate, as the FCA suggests?
Chronically low interest rates have forced savers to shop around to find the best deals on easy-access accounts that often fail to beat the current rate of inflation, but new proposals from the Financial Conduct Authority would see a basic savings rate introduced across the board. The city watchdog has announced today that it is consulting on a range of options to improve competition within the cash savings market, including the introduction of a basic savings rate. The regulator has said it is concerned the market under its current set-up rewards consumers that shop around with the most attractive rates of interest, but punishes loyal customers with lower rates. Often, high-street banks and building societies will offer attractive teaser rates of interest to new customers, only to revert to a much lower rate after a certain period – typically a year. This means that customers who choose to stick with their savings account often miss out on the highest rate, while those … [Read more...] about Basic savings rate would reward loyal customers, but banks won’t take it lying down
Opinion Carl Lamb, managing director of Almary Green Picture: Almary Green Archant For the first time ever, I think I’m going to have some money available to put into a savings account this year – probably about £7,000 – as I am getting an inheritance from my grandmother who died recently. I’ve been looking at ISAs and bank accounts and am a little confused about what tax I might have to pay. Am I right in thinking that I don’t need to open an ISA as the interest I get if I put it into a savings account won’t be taxed? Response from Carl Lamb of Almary Green You are right that provided you are not an additional rate taxpayer, you are not likely to pay tax on the interest on your savings if you put it into a regular bank savings account as long as the total interest you get is less than your personal savings allowance. Basic rate taxpayers get a personal savings allowance of £1,000 which means that the first £1,000 of interest … [Read more...] about Ask the Expert: What’s the point of putting my savings into an ISA?