It’s obvious to see how far cash savings have fallen over the years and how increasingly difficult it is to avoid inflation eroding your nest egg. In stark contrast are the striking potential returns that can result from investing in stocks and shares. But it’s worth remembering that fund values can fall as well as rise – so if the market drops, it’s bad news for your original investment.
Those who are not prepared to gamble their cash may have to think differently. Cautious savers putting money aside may still prefer to invest in cash to get a simple return of interest as a reward for investing with that provider. These savings can make it a lot more straightforward to plan ahead – if you have something specific in mind. Here is a run-down of the best deals for different goals.
High interest current accounts
Some of the most lucrative cash rates around today are on offer from current accounts, which may well be grabbing savers’ attention. TSB offers 3 per cent AER on its Classic Plus on balances up to £1,500, but there are limitations such as the requirement to fund the account by £500 per month and signing up to online banking and paperless statements. These obstacles may still be worth doing though as the account also pays £5 for making 20 debit card payments each month and £5 for holding two direct debits. It’s quite a decent bundle, but the temptation to withdraw cash and not stick to a savings plan might be too great.
Regular savings accounts
Regular savings accounts are ideal for those who want to be more focused while saving for a short-term goal – usually over a year. The best rate for new customers comes from Saffron Building Society, paying 3.5