FINANCE
What are the alternatives to National Savings & Investments? National Savings & Investments (NS&I) is a firm favourite among UK savers, who appreciate its secure government backing and the excitement of its premium bond prize draws. Yet with interest rates on its products typically below the rate of inflation and often lower than those offered elsewhere, it might be wor th considering alternative options. The decision that’s right for you will depend on your individual needs and goals, which a financial adviser can provide clarity over. In the meantime, here are some alternatives to consider.
CASH SAVINGS With interest rates at historic lows, it can seem an uphill struggle to get a return on cash savings. But it is wise to have an accessible pot of cash for use in an emergency, or simply to meet regular bills if you face a salary cut. Financial advisers typically recommend holding six months’ worth of essential spending in an easy-access account. You can find the top paying accounts using comparison sites such as moneyfacts.co.uk and moneysuper market.co.uk. These compare accounts from NS&I alongside a whole host of banks and building societies.
If you’ve built up a cash buffer and have some ❛❛ time on your hands before you need the money, you could consider investing in the stock market. ❜❜ 36
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Fixed-rate savings accounts tend to offer slightly higher returns, but you need to be willing to commit your money for between two and five years. If you withdraw money before the end of the fixed-rate period you might have to pay a penalty, so this option probably isn’t suitable if you’re holding cash for its easy accessibility. Bear in mind that all deposits held with NS&I are protected by the government. With a bank or building society, a maximum of £85,000 per person, per banking licence is protected by the Financial Services Compensation Scheme. Depositing no more than £85,000 with the same banking group could help you earn the best rates while keeping your money safe.
