The new tax year began on April 6, marking the start of a new financial cycle for households across the country. As we leave behind the challenges of the past year, savings experts are encouraging people to make the most of their money by moving it out of low interest rate accounts.
With interest rates at an all-time low, many people have been left disappointed by the returns on their savings. In fact, according to recent research, the average interest rate on easy access savings accounts has fallen to just 0.17%, while cash ISAs are offering an average of 0.36%. This means that by keeping our money in these accounts, we are essentially losing out on potential earnings.
But with the new tax year comes new opportunities. This is the perfect time to review our savings and make some changes that could make a significant difference in the long run. So, let’s take a look at why it’s important to move our money out of low interest rate accounts and where we can potentially find better returns.
First and foremost, it’s important to understand that inflation can have a major impact on our savings. As prices of goods and services increase, the value of our money decreases. This means that if our savings are not earning enough to keep up with inflation, we are essentially losing money. By moving our money into high interest rate accounts, we can ensure that our savings are at least keeping pace with inflation, if not earning more.
Furthermore, with the ongoing economic uncertainty caused by the pandemic, it’s crucial to have a strong financial buffer. By maximizing the returns on our savings, we can build up a safety net for any unforeseen expenses or emergencies. This will give us peace of mind and a sense of financial security.
So, where can we find better returns on our savings? The answer may lie in alternative options such as fixed-term savings accounts, stocks and shares ISAs, and peer-to-peer lending platforms. While these options come with some degree of risk, they also have the potential to offer higher returns than traditional savings accounts. It’s important to do thorough research and seek professional advice before making any investment decisions.
Another option to consider is switching to a high interest current account. Many banks offer competitive interest rates on their current accounts, with some even offering cashback rewards and other benefits. By switching to one of these accounts, we can earn more on our money while still having easy access to it.
Moreover, it’s always a good idea to regularly review our savings and make adjustments accordingly. As the economic landscape changes, so do the interest rates and offers from different financial institutions. By keeping an eye on the market, we can take advantage of any new opportunities that may arise.
It’s also worth considering the option of consolidating our debts. If we have multiple loans or credit cards with high interest rates, it may be beneficial to consolidate them into one lower interest rate loan. This will not only save us money on interest payments, but it will also make managing our finances easier and more streamlined.
In addition, we can also look into switching our energy, phone, and insurance providers to potentially save more money. Many companies offer introductory rates and discounts for new customers, so it’s always worth shopping around to find the best deals.
In conclusion, the new tax year presents us with a great opportunity to review our savings and make some changes that could benefit us in the long run. By moving our money out of low interest rate accounts and exploring alternative options, we can potentially earn more and secure our financial future. So, let’s take action and make the most of our money. After all, every penny counts.
