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Posts Tagged ‘savings accounts’

If you managed to make use of your Individual Savings Account (ISA) allowance in the last tax year, then you will be pleased to know that as of 6th April, you have another £7,200 of potential tax free investments in which you can deposit into ISAs.

If you didn’t manage to use up last years ISA allowance don’t worry, just deposit your savings into an account as soon as possible and benefit from tax free returns on your investment.

If you aren’t familiar with ISAs, it’s well worth checking them out, as you could be missing out on some great tax-free returns on savings and investments.

Savers are given a great opportunity to save at least £3,600 each year (also further possible £3,600 in investment ISAs) and pay no tax on any of the earnings. All individuals aged 16 and over can apply for an ISA, giving them the opportunity to invest upto £7,200 each tax year and earn tax free returns on their investment. The ISA allowance can be made up of either up to the full £7,200 in an investment ISA, or up to £3,600 in a cash ISA, and up to the remaining amount in an investment ISA.

Think of cash ISAs like a savings account, offering all of the features you would expect to see in a number of types of savings accounts, but with the difference being that you don’t have to pay any tax on the returns on your investment. It is common knowledge that with stocks and shares dealing comes risk, and there are no exceptions when it comes to investment ISAs, so you must be careful with where you plan to invest.

There are several different combinations of features that will differ from provider to provider, so it is up to you to choose the one that suits you best. You can choose whether you want to make a lump sum investment, or regular payments, and if you want your interest to added onto the total, or paid into a separate account.

UK Price Comparison website Which4U – Compare Credit Cards, Savings Accounts, Fixed Rate Bonds, Bank Accounts, ISAs, Loans, Mortgages, Insurance, TV & Broadband and Gas/Electric bills to find the best UK deals

Cash ISAs have become a very popular saving method in the UK, but it is surprising to hear that many have not heard of stocks & shares ISAs, which if used effectively can provide huge profits, all of which remain tax free.

If you don't know much about ISAs, here's some helpul information. Each year, everyone over the age of 16 is entitled to a tax free savings allowance. The total limit is currently set at £7,200 (although there have been rumours that this will increase) of which a maximum of £3,600 can be invested into a cash ISA, then the remaining amount into a stocks and shares ISA, or the full allowance £7,200 can be used to invest in a stocks and shares ISA.

Any interest earned from cash ISAs, or similarly any returns gained through stocks and shares ISAs is completely tax-free, helping your savings to grow faster.

Cash ISAs usually offer savers attractive rates of interest, but if you don't mind involving an element of risk to give you the potential to earn some great returns, you may want to consider investment ISAs. As with all dealings on the stock market, there is an element of risk involved, so you have to do a bit of research into where you choose to invest, and steer clear of shares that are likely to fall.

There are now a number of people who became millionaires from investing their yearly ISA allowance (£7,200) in stocks and shares and investment ISAs, allowing them to do so without paying a penny in taxes.

These Isa millionaires did take around 20 years to build up to this figure – including ISAs predecessors ‘personal equity plans’ (Peps) which were previously used as a form of tax shelter.

This new breed of ISA millionaires will all give you the same advice, never waste a year’s Pep or Isa allowance.

This was of course down to knowledge and luck, as an ISA wrapper allows you to invest in what you want, as opposed to letting a bank invest on your behalf, but this can be half the fun of it. It doesn’t take long to see that these people have saved hundreds of thousands that would have otherwise gone straight to the tax-man

Last year, despite the state of the economy, Barclays Stockbrokers produced a number of people lucky enough to become ISA millionaires from their stock selections.

UK Price Comparison website Which4U – Compare Credit Cards, Savings Accounts, Fixed Rate Bonds, Bank Accounts, ISAs, Loans, Mortgages, Insurance, TV & Broadband and Gas/Electric bills to find the best UK deals

Fixed rate bonds are savings accounts with a difference. To start with, they are more of an investment than simply somewhere to save your cash, and like most investments, they come with an element of risk.

Is is important to be aware of how much compensation is offered by your provider, incase it were to collapse. Always aim slightly lower than the maximum compensation limit to allow your investment to grow without exceeding this limit. Alternatively, you could have your interest paid into a separate account

Unlike an instant access savings account that has lots of activity with constant withdrawals and deposits, bonds generally only allow you to make a single lump-sum deposit, with no additional deposits throughout the rate. Earl withdrawals – though possible, will result in penalties such as having your interest capped or in some cases closing the account completely.

Fixed rate bonds are designed to encourage long term saving, offering high 'fixed rates' for accounts that are left untouched for the life of the bond. This is because inflation is used to measure the increase in price, so anything below it would effectively cause your money to erode. Once the term reaches an end you are able to access your balance with the added interest.

The main elements of a bond account are the fixed term – this is the period of time you agree to lock your money away for, and the fixed rate – this is the rate at which your interest will be earned.

Another difference between fixed rate bonds and instant access accounts is that that the rate offered upon opening the account will not fluctuate to reflect changes made to the Bank rate. This allows you to lock your cash in on a rate that will remain the same throughout the chosen term, so you can predict exactly how much the account will earn.

This can allow you to freeze you account on a high rate, allowing you to protect your savings from falling rates and earn the highest returns.

Last year saw the economy suffer a big blow, which resulted in rates being slashed in an attempt to stimulate the economy by reducing some mortgage holders, and encouraging lending. This had a big effect on the rates offered on savings accounts, so anyone that opened a fixed rate bond account before October would be feeling very smug.

This can also work the other way, as you could lock in on a rate, then soon after see rates rise, while you are left behind earning under the odds on your savings.

You can, to an extent, make predictions on the direct the rate is likely to go. Many clever savers took advantage of the credit crunch by spottin a trend in falling interest rates and locking in on a high rate to avoid falling rates. With The Bank of England base rate now at its lowest point on record, savers are getting less returns on investments. Many economists believe the rate will continue to drop as low as 0%, so now may be the time to avoid further losses and freeze your rate with a fixed rate bond.

UK Price Comparison website Which4U – Compare Credit Cards, Savings Accounts, Fixed Rate Bonds, Bank Accounts, ISAs, Loans, Mortgages, Insurance, TV & Broadband and Gas/Electric bills to find the best UK deals

Since the credit-crunch, savers have become much more cautious and are keen to not only seek the best returns, but also a safe haven.

Over the last 6 months, rates have been on a downward turn, so savers must be careful with where they store their cash in order to get the highest returns.

The two obvious choices in today’s savings market are Term Bonds, and Individual Savings Accounts (ISA). Although both types of savings accounts have their similarities, there are several advantages and disadvantages to each and it is this topic of discussion that this article will be focussing on.

Fixed Rate Bonds

Term Bonds provide a rate that is fixed throughout the duration of the bond, giving savers a predictable income with no surprises. Once you have chosen a fixed rate account, you are able to calculate exactly how much interest you will earn, minus the tax, to give you your end balance.

Most Fixed Bonds offer very high deposit limits, generally between £500,000 to £2 million, but some, such as ICICI, will let you invest as much as you like. Fixed rate bonds tend to only allow a single deposit upon opening the account.

There are no limits to how many fixed rate bond accounts you can open within any one year, so unlike ISA accounts, if you decide to close your account for any reason, you can still invest any amount elsewhere at any time.

Fixed Term Bonds generally offer the highest saving rates available, but these tend to be on shorter-term bonds, as they carry less risk to significant rate cuts leading to banks and building societies paying you over the odds in interest for long periods of time.

‘What goes up must come down’
If you are extremely lucky – and do your research, you could open a fixed rate bond before rates significantly fall, allowing you to earn well above savings rates offered to new and variable rate customers. If you cast your mind back to October last year, when the Base rate stood at 5%, you would be very happy with yourself if you were earning this kind of rate on your savings today, with the Base rate now at 0.5%.

A big element to a fixed rate bonds is the fixed term. You must be realistic with your finances and only go for this option if you can afford to lock your money away for some time. If you find that you need to withdraw any amount from your account, the bond will close and in most cases you will lose any interest to accumulated to date.

As well as the possibility of rates falling during the life of your bond, you could see the opposite effect, with rates significantly rising, leaving you locked in at a low rate. Before applying for a fixed rate bond you may wish to consider doing some research into recent trends in the base rate. It has been predicted by some economists that The Bank of England base rate will constinue to fall throughout the year.

Like any normal savings account, you have to pay tax on any interest accumulated, as this counts as income. The general tax rate is 20% for those earning less that £34,800 per annual, and 40% for anything above. There are other conditions to non-earners so check out the HM Revenue for more information.

Individual Savings Accounts

Individual Savings Accounts (ISA’s) offer a tax free alternative to saving. ISA's are very similar to regular savings accounts, but ISAs allow savers to benefit from tax free interest. Every year you are entitled to add up to £3,600 to your ISA, and the interest accumulated from your total balance will be tax free for life. You can deposit up to £3,600 between now and April 2009, which is when your allowance is renewed.

Like many savings accounts, ISA’s offer a variety of options such as instant access, fixed rate, and base rate guarantees.

Unlike a fixed rate bond, most ISA’s allow you to deposit as many times as you like throughout the year, as long as you stay within your £3,600 annual limit. It is better if you can afford to deposit the full amount at the beginning of the tax year, as this will allow you to earn the maximum possible interest, but for those that would rather have the flexibility to save as they earn, ISA’s are great for making monthly deposits from a salary.

Bonds and ISAs both encourage savers to leave their savings to grow, without making withdrawals. However, rather than deducting the interest earned to date and closing the account, ISA’s simply give savers an annual deposit limit of £3,600, and once this has been reached, no more can be added, regardless of any withdrawals.

Because savers can get good returns from paying no tax on the interest they earn, ISA’s tend to offer lower rates than Term Bonds.

Most ISA’s are affected by cuts made to the Bank of England Base rate, so if you open an ISA when rates are high, you cannot guarantee they will stay high. Fixed rate ISA’s allow you to fix in at a rate for a specified term, but this does carry some risk, as rates change, especially over a long term.

Always check out what kind of compensation scheme is used by your proposed bank or building society to ensure that your savings are covered in full. For more information on this, see Which4U’s Top Ten Savings Tips.

The bottom line for all savings accounts is to ensure you are earning the highest possible returns on your money. Although ISA’s offer tax free interest, you may find that the difference in rates offered against fixed rate bonds will in fact leave you worse off. Before making a choice, compare the savings market for the best deals, and use your new found knowledge of these accounts to make an educated decision on where to invest your savings.

One last thing to remember is to always make sure (where possible) you keep the interest rates paid on your account above the rate of inflation (incuding tax deductions), as anything below would result in your money actually losing value. Inflation is used to measure the rate at which prices will increase, so if this level is higher than the interest you are earning, your money will be slowly eroding.

UK Price Comparison website Which4U – Compare Credit Cards, Savings Accounts, Fixed Rate Savings Bonds, Bank Accounts, ISAs, Loans, Mortgages, Insurance, TV & Broadband and Gas/Electric bills to find the best UK deals

Saving money need not be too complicated.Making a few simple changes to your daily routine can quickly lead to easy savings.  The key to growing your personal wealth is to spend less and to seek small things that drain money from your pocket and leave more to keep growing in your savings account. 

Below are five easy suggestions to cut your household budget and improve your cash position each month. 

Regularly Check for Water Leaks on Your Plumbing

Leaking faucets and plumbing pipes are sure money drainers.Fixing up your leaks will save precious water and save you money. 

By simply checking your plumbing each week, you can avoid wasting thousands of gallons of water each month which could make a big hole in your pocket.You can see saving money is simple and doesn’t take any complicated skills.  Just check for leaking pipes and you can surely get big savings. 

Become an Eco-Driver

Saving money and driving safely can be synonymous.Driving was a little thought can have big impacts on fuel economy and reducing wear and tear on your auto.  Your car can become a gas guzzler if you drive aggressively. 

You can get big savings if you will always cruise comfortably on highways.  You can reduce your gas mileage by 33 percent if you will practice defensive driving on major highways.  You can also get big savings if you drive with a cooler head on city streets. 

You must also park your car in the shade so you can reduce your battery and fuel costs by fifty percent.  Saving money is possible by just becoming a wise driver. 

Regularly Defrost Your Freezer

If you notice ice starting to build up in the freezer then put your items in a cool box while you defrost the freezer.  Your energy consumption will be greater if your freezer has an inch of frost.  You can get big savings and fresher food if your freezer is highly efficient. 

Saving money on your daily energy consumption is possible if you keep your freezer in top shape.  Your foods will also taste great because your freezer keeps them fresher. 

Using Energy Saving Lightbulbs to Save Money

If you want to enjoy more savings from your monthly electric bill, then better use compact fluorescent lamps or CFL.Enery saving bulbs can produce the same amount of light as a regular bulb but using far less power. 

You can enjoy a 20 percent drop in your energy consumption if you use CFL in your house.  Saving money therefore is possible just by changing your light bulbs.  You don’t need to be a financial whiz to change light bulbs. 

Saving Money by Collecting Discount Coupons

Do not be ashamed to collect discount coupons because you can get big savings from them.In the current economic conditions more and more people are trying to save so take advantage of the savings on offer. 

You will be able to get discount coupons on Sunday newspapers or from online shopping networks.Go a get your scissors and start hunting out coupons for bargains in your area. 

Saving money is not complicated.You don’t require a degree in economics to save money, just a little common sense.

Article by R. Greenwood of http://www.compareyourbank.com.au

With the economy facing big problems here and around the world this year now is the time to shed debts and start some savings goals to buy major items debt free using high interest savings accounts. Wanting to save money is a good start but it will take more than that. This won’t be enough. Saving money requires a disciplined, well-organised approach.

Below are a few savings tips:

Establish specific goals for saving money
Setting goals helps keen you focussed each month with your savings. It gives added motivation, because you know you’re saving money for something you really want. Goals keep you on track as you know how much to save each month. The goals could be:

• Saving up for an emergency cash reserve equivalent to 3–6 months’ living expenses
* Saving for the deposit for your next home
• Saving more money in your super
• Saving enough for a holiday in a particular destination

Set a specific time frame for achieving each goal. When you have figured out your goals and the dates you want to reach your goals you should divide the goal amount by the number of weeks or months between now and your goal date. The result is the amount you need to save from each pay cheque.

Make saving money pay
Those who are serious about reach their goals will take time to seek out the account paying the best interest rates. The interest rates offered by standard transaction accounts won’t help you reach your savings goals. One tof the easiest ways to find the best interest rates is to use a finance comparison website.

If you had $5,000 left alone for a year in an ordinary savings account, you’d be likely to still have $5,000 at the end of 12 months. If you had the same $5,000 sitting in a high interest savings account for a year, you’d likely have more than $5,400 at the end of 12 months. High interest savings accounts attract around 7–8 per cent, which means you get paid for saving money.

Make saving money automatic
Very often, one’s idea of saving money is to save the amount left over each month after paying all outgoings. This reliance on self-discipline and the amount left over is good, but not good enough. Don’t let yourself get tempted by the money you earn and automate your savings deposits as far as possible.

One of the simplest methods is to have part of your salary directly deposited by your employer into your. Once you have set this up then it will take place automatically and you don’t need to remember. However, you may have to provide information about your high interest savings account. If you don’t want to do that, you can link the high interest savings account to your normal bank account.

Find ways to boost income
Increasing monthly income is a great way to help achieve big goals, but it is often neglected. By boosting income, you can save larger sums more quickly. There are ways to reach your goals faster such as working multiple jobs, putting your handup for overtime or doing odd jobs for neighbours. Sell some stuff you don’t need, or find ways to generate income from your hobbies.

Summing up, learn to be patient through all these. Progress may be excruciatingly slow at the start, but things will accelerate. You’ll find new ways to cut your expenses or to boost income. You may even get unexpected support or extra bonuses. Stay focused on your big goals and you’re likely to succeed.

Article by R Greenwood of Compare Your Bank which allows consumers to compare banks online.

Some people find it difficult to manage their finances, particularly given the fast pace of life that many people live these days. Dealing with bills, payments, transfers, and keeping an eye on your balance can be very difficult when you have other full time commitments, and many people simply don’t have the time to keep phoning their bank or calling in at the branch in order to keep on top of their finances.

Over recent years one effective solution for many banking customers has been the availability of online banking facilities, and many consumers have saved themselves a lot of time, hassle, and stress by managing their bank accounts and finances online rather than have to face lengthy queues at the branch or on the phone.

You will find that there are some major high street banks that offer traditional branch and phone banking facilities, as well as online banking facilities, enabling consumers to enjoy choice as well as convenience. There are also banks that operate exclusively online, offering a comprehensive banking service that you can access from your very own home or office.

You can conduct pretty much all of your financial matters when you use online banking, and this includes transferring money, making bill payments, setting up direct debits and standing orders, checking your statements, ordering banking stationery, and more. This has eliminated the need for many customers to have to contact their banks in person or by phone.

With online banking now offering such a comprehensive service it is little wonder that so many people have started using the online banking facilities offered by their banks. When you register for online banking you will receive a personal password and security code, which you should keep safe. You should make sure that you do not store these on a shared computer for your safety and security.

Obviously in order to protect your security and safety you need to be sensible about your online banking details. When you register for online banking you will receive your own personal password and security number, and this should be kept safe and secure. This means avoiding taking risks such as saving your password and security details on a shared computer, as this could increase the risk of becoming a victim of online banking fraud.

Whilst many banks do offer online banking facilities, there are some that may not, so you need to ensure that you check with your bank with regards to whether online banking facilities are on offer. You may prefer to sign up with a bank that operates exclusively online, and there are banks such as First Direct that offer this service. With online banking you can enjoy a more convenient and speedy way of operating your current and your saving accounts without even leaving the home.