When making savings, getting better interest usually means sacrificing the ability to access your money. Current accounts give you the easiest access, with money on-hand for spending or withdrawal through your debit card, but give next to no interest. Easy-access savings accounts allow you to instantly put money in or take it out again online, but only offer somewhat better rates. The best interest rates of all, meanwhile, are the preserve of accounts that require you to tie up your money for a few years and agree not to access it at all – or at least to accept an interest penalty and lose the full benefit of those great rates if you do.
At a time when interest rates on the whole are so disappointing, it’s very tempting to try and squeeze the most you possibly can out of your money. This is all very well if you’re in a fairly comfortable position and can afford to put a hefty chunk away for a few years in order to get more interest when you get it back. But what if you can’t afford to give up access to your money altogether, in case you need that money for some emergency? How do you make the most out of your money without losing it altogether?
High Interest Current Accounts
High interest current accounts are definitely one of the best ways to balance both having access to your money and getting more interest. They break all the usual rules, giving you instant access to your money through your debit card while offering rates that beat a lot of “full-fledged” savings accounts. They usually carry conditions, such as minimum funding limits or even a monthly charge, and also have a limit on how much of your balance can get the high interest rate, but there are lots of choices out there. Read the details in full, and you may well find an account to suit you.
Search the Whole Market
Another way to get the most you can out of your savings is to search the whole market. Don’t be afraid of smaller or lesser-known banks, especially if it’s just for your savings. Bear in mind that although most current accounts come with a savings account attached, there is little reason why your favoured savings account should be with the same bank or building society as your current account. As long as your account gives you as much access as you need, you should be able to transfer funds back to your main bank within a single business day if you need them.
Unfortunately, there is no account out there right now that offers the kind of rates that would have been considered good ten years ago. The difference between most savings accounts is probably a percentage point or two, so unless you have a lot to put away this probably won’t add up to much over the course of a year. By all means try to get the most you can out of what you have, but make sure you strike the right balance. Don’t be tempted to give up accessibility that you might really need just for an extra 1% in interest.