Money saving resolutions for the New Year

It does not matter whether you have a load of cash in the bank or just a few pounds for a rainy day – everyone wants to get their money to work harder for them.

There are a number of different and simple ways to make your money become more without even lifting a finger. Follow these tips to make your savings become more profitable.

Use your cash ISA allowance

It just makes sense to use an ISA cash allowance so that the boys at the tax office cannot touch your returns. With this type of account, you can save up to five thousand, one hundred pounds per year. In April the limits will rise and therefore allow you to get more money. An easy access account is most probably the best type of account to have if you wan to see your money come in fast. Check to see what the different ISA accounts pay you in interest before you make a decision.

Get interest back on your current account

It may seem like a silly thing to say, but you can get a rather large amount of interest back if you leave a relatively large sum of money in your current account for a decent period of time. Be sure to compare the different current accounts available before jumping into the first thing you get your hands onto. Do your homework and it will pay off in the end.

Move when the bonus ends

Most savings accounts are boosted with something called a bonus rate. This means that you earn a lot of interest for the first twelve months and then the rate drops dramatically. It is possible to find some really great deals on easy access accounts, so do not avoid using them just because of the bonus. Look online for the best current account rates for 2013, and switch your account before the bonus ends, therefore allowing you to continue with a good interest rate on a different account.

Save on a regular basis

It does not matter if you can only save a small amount of money every month, the main point is that you save what you can afford and eventually you will reap the benefits. Putting just five pounds away per week will give you a saving of two hundred and sixty pounds at the end of the year. You can earn great interest rates if you can afford to save twenty-five pounds or more per month. If you can save between twenty-five and two hundred and fifty pounds per month, you can make 5% interest per annum. You cannot touch the money in this account for a period of one year, which will help to deter you from taking money out for unnecessary things.

Look into fixed rate accounts

If you have a lump sum of money that you want o put somewhere safe, then you may want to look into a fixed rate account. You will not have access to the money for the period of the fixed rate, but the interest that you earn on these types of accounts is a lot higher than regular accounts. Just remember that when interest rates rise again, the rate may not seem as good as it did before. No one is saying that it is not a good idea to open this type of account, just that you need to be aware of all the pros and cons before you open any account.

Never save more than £85k in any one account

Under the FSCS, the government guarantees the first £85k in any one banking account. It can get tricky when you have your money in a bank that owns shares in other banks, so check that the bank you choose to bank with is independently owned to avoid problems later on.

Save in your spouse’s name

It may help saving in your spouse’s name if you are paying more tax. It is legal and is a way to save loads of money every month. You can end up only paying the basic tax rate instead of the 405 that you would pay if you had to bank the money in your name or the 50% that the highest earners get charged.

Clear your debts before you start

Everyone needs some cash in an easy access account for those rainy days, but make sure that you have paid your debts off before you go into saving big time. If you have money saved then you should consider paying off your debts before you head on into saving otherwise you may run into issues later on down the line.

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