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SAVING MORE WITH YOUR SAVINGS

It's great to have some money put by for future needs, retirement, children's education, a special vacation or trip, or to start a business. BUT are you getting the best value for those savings? Here we look at the factors that influence your choice of temporary home for that hard earned cash.

Time Frame

Timing with savings and investments is everything, if you have money and today see a good, secure deal than maybe you should take it, or tomorrow you may be faced with lesser returns.

If interest rates are improving you may be able to SWITCH money from one savings to another and earning BETTER INTEREST. Watch for any penalties on early withdrawal which may reduce or negate the extra benefit the new savings program offers.

Amount

The more you have to invest the better the deal you can usually strike in two ways;

• a bigger investment can usually demand a better interest rate.
• you can SPLIT investments between different saving plans and banks especially where returns are based on performance such as shares or investment trusts. The future is unknown so one investment could do well, while another poorly, spreading the risk evens out the returns and avoid you having invested the lot in the worst performer.

A few hundred is perhaps best in the local bank, but its worth shopping around on rates for savings of a few thousand, more so the more you have. For huge amounts, perhaps a lottery win, inheritance or sale of a property or business it's worth taking independent advice before making any decisions as to where to invest for maximum return and safety.

Taxation

If you are retired you may pay no tax or little tax, some savings deduct tax at source so you may end up paying tax unnecessarily.

If you do pay tax then you are paying it immediately so getting interest untaxed can give you maybe a year before you need to pay the tax, earning more in the meantime.

Watch being confused by interest rates - for a tax paying saver 5% tax paid is better than 5.25% gross.

Location

Often we invest in places that are local or handy - the high street bank or building society, where we can see someone personally to discuss options and make decisions. Feeling safe and comfortable that your money is secure is a big part of wise investing.

Many investments can be conduced electronically, by the internet, telephone and post so the sky's the limit.

Foreign investments are however best avoided for the average private saver.

Security

Above all else your money needs to be secure so investments with banks, building societies and finance houses is pretty sound and usually covered by legislation should things ever go wrong.

Lending to people or firms you do not know in return for a big interest or returns carries a lot of risk, and you could loose your entire stake.

If someone advertises a return on your investment which looks too good to be true it probably is!.

Ease of access

You may want to get at your money quickly or at least some of it. Ready money earns the worst rate of interest for normal users, unless you have a large wad, then you can make a great interest rate lending it day to day to local authorities who need top ups on a regular basis.

Putting money away for a few years will normally pay you the best rate, but only if you invest at fixed rates when interest rate is high, you score by investing at a high rate and if/when rates go down your investment is even wiser.

And finally it's worth checking www.internet-online-privacy.com to see the dangers to everyone when using the internet.

Please feel free to Contact Us with questions or to give us information to add to our knowledge base.