Use Locally - Issue 83 March 2020 access to the funds, you can get more from your money by ORFNLQJ LQ D ž[HG UDWH )L[HG rate savings accounts and ISAs are typically available IURP RQH WR žYH \HDUV DQG the longer your money is tied up the higher the rate you’ll get.
Stepping stone investing and other ways to get more from your money If you don’t have much money left for saving or investing once your essential bills have been paid, it’s important to make sure you get the most out of your money and make good use of compound interest. The stepping stone method can bring huge rewards even if you only have small amounts to invest each month, but there’s D ZKROH UDQJH RI RWKHU žQDQFLDO products and strategies you could also use to seriously LPSURYH \RXU žQDQFLDO VLWXDWLRQ over time. Saving and investing using the stepping stone method The stepping stone method involves increasing the amount you save or invest by 10% each year. Whether you start off with £100 or £10, exponentially you could achieve a considerable increase in your return with minimal effect on your monthly žQDQFHV If you’re reluctant to invest, žQGLQJ D JRRG VDYLQJV DFFRXQW 6
or current account that pays credit interest can reap serious rewards, even for smaller amounts. This is what makes the stepping stone method so accessible, and one of the best ways to get the most from your money. If you do decide to invest, be aware that investments can go down as well as up and past performance is no guarantee of future growth, so you’d need to take professional advice before going ahead. Current accounts for credit interest If you pay a regular sum into your current account, such as your wages, you may be entitled to credit interest on your balance. Some current accounts offer higher rates of interest than savings accounts, but you’ll need to meet each bank’s eligibility criteria. &RQVLGHU ORFNLQJ LQ D ž[HG rate If you’re sure you won’t need
Move your money around It doesn’t pay to be loyal to companies these days as the best deals are typically offered to new customers. )URP WKH EDQNV¾ SHUVSHFWLYH a higher interest rate does attract new business but, again, these offers are often time-limited. Tracker accounts Tracker accounts track the Bank of England base UDWH DQG RIIHU D VSHFLžF SHUFHQWDJH žJXUH DERYH WKLV UDWH IRU D GHžQHG SHULRG RI time. They help to ensure \RX EHQHžW IURP DQ\ LQWHUHVW UDWH ULVHV DV VRPH žQDQFLDO institutions are slow to pass these on to their customers. What about a monthly saver? Regular savings accounts can be a good way to maximise your savings. You gain access to a higher LQWHUHVW UDWH IRU D ž[HG timescale, but there are limits on how much you can put away each month. )LQGLQJ WKH ULJKW žQDQFLDO products takes a little time and effort but the rewards can be high as compound interest takes effect. Whether you try the stepping stone method or take advantage RI VSHFLžF GHDOV PDNLQJ WKH most of your money offers žQDQFLDO VWDELOLW\ DQG SHDFH of mind for the future. By Ann Haldon
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