10:58 17 July 2013
Savers see a ray of hope as Kent Reliance and Halifax declare an increase in savings interest rates after more than a year of disappointing returns. Based on reports, interest rates on savings accounts have drastically dropped when the Funding for Lending was introduced last August 2012.
This gave the building societies and banks the opportunity to draw on money provided by the government, thus diminishing the worth of funds from private investors.
Putting money in savings accounts is definitely good but returns for your hard-earned money can be improved and still be secured. There are a number of savings and investment options to choose from.
You can find the best deals by constantly monitoring the market and actively keeping tabs on what savings accounts can provide higher interest rates. This may require quite a bit of work on your end, but that is the only way to squeeze more income from your savings. For example if you notice that fixed rates are steadily going down, then you can look at investing on one-year bonds to get higher yield.
Putting your eggs in one basket is never a good savings principle. You should invest your money in several facilities – cash savings, government bonds and shares, and ISA. Spreading your wealth will reduce the risk and still earn a decent income so that when one investment is not doing well, the others can offset the downtrend.
Other investment options you can consider are corporate bond funds, equity income funds, high-yield shares, property funds or peer-to-peer saving and lending. Savers should always have access to cash for emergencies regardless even if it is low interest bearing.
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