subject: Finding the best home for your savings [print this page] Finding the best home for your savings Finding the best home for your savings
The average instant access savings account currently pays a measly 0.79% interest, and even the market-leading deals pay less than 3% these days.
Given that just a couple of years ago, bank were offering savings accounts that paid rates of around 6% or 7% to attract your money, savers must now work much harder in order to get a decent return on their savings.
However, there are ways in which savers can qualify for better rates. For example, if you are prepared to lock your money away for a fixed period of time, you could benefit from significantly higher rates than you would expect to earn from instant access accounts with a fixed rate bond.
Bonds can be flexible too, and with a wide range of options to choose from you can find the perfect bond to suit you, from the length of the term; to the frequency of interest payments.
If you already have savings this can be an advantage, as a number of bonds require a minimum balance ranging between 3,500 to 50,000. With the RBS bond you can earn 4.10% by investing a minimum of 3,600 for a 3 year period.
However, if you would prefer a shorter term with no minimum opening balance there are some accounts that allow deposits as low as 1. For instance, this offer is available on the Santander bond which offers 3.20% based on a 2 year term.
You can even mix up your investment in some of the longer running bonds, for example with the Skipton Bond '5.5 Year Guaranteed Double Asset', a third of your money is put into a 1 year fixed rate bond paying 5.25%, while the other two-thirds is invested into a FTSE 100 index linked bond returning 100% of any positive growth up to a maximum return of 50%.
Alternatively, if you're happy put some money aside each month you can also benefit from some attractive regular saver accounts.
A new market beating regular savings account was launched by Skipton Building Society last week paying an impressive 5% which allows people to deposit 10 - 500 per month.
This, according to Moneyfacts, makes it the best regular savings rate on the market, excluding those that require account holders to 'jump through hoops' in order to benefit from high rates.
