How to get your money growing despite barren interest rates
| Published date | 28 April 2021 |
| Publication title | Daily Record, The / Sunday Mail (Glasgow, Scotland) |
The rot set in after the financial crisis and the pandemic has made things worse, with the Bank of England cutting base rates to 0.1 per cent during the first lockdown last March and that's where they stand today.
With a little effort, you can get a higher return. So, where should you put your savings today?
Save for a rainy day Financial advisers say everybody should have a pot of "rainy day" money for emergencies such as illness, redundancy or a sudden expense, for example, car or boiler repairs.
The pandemic has highlighted the value of this, but many will struggle to build up their reserves as their earnings have been hammered by repeated lockdowns.
Others have built up their savings, putting aside a staggering £228billion in 2020, official figures show.
Anna Bowes, founder of savings rate tracking service Savings Champion, hopes this trend would continue, saying: "It would be great to think we are a nation of savers again."
You should hold your rainy day money in an easy access savings account that you can withdraw if you need it in a hurry.
Right now, Marcus by Goldman Sachs, Charter Savings Bank and
Renault-owned RCI Bank all pay interest rates of 0.4 per cent. These are horribly low by historical standards, but the best you can get today.
Charter requires a minimum deposit of £5000, but RCI's Freedom Savings Account requires just £100, and Marcus just £1. Paragon, meanwhile, pays 0.41 per cent on £1 and above.
Yorkshire Building Society's Annual Access Account Issue 8 pays 0.45 per cent on £1 and above, but restricts customers to just one withdrawal a year on the anniversary of opening the account, so may not work for your rainy day cash.
When comparing savings accounts, always look at the small print.
Andrew Hagger, founder of personal finance research firm
MoneyComms, said: "The best savings rates are typically only available online, so you may have to hunt harder if you want a postal or branch-based account."
Remember that savings rates on easy access accounts are typically variable, so can be cut at any time.
Emma Preston, 36, is living in Durham with her mother. She wants to save money to give her the freedom to move abroad, but feels frustrated by today's rates.
Emma said: "Investing in shares is too risky for me, as my disposable income is not big enough to risk losing money."
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