How To Grow Your Savings To Prepare For Whatever The Future Holds

publication date: Jun 1, 2020
author/source: Emily Roberts

silver and gold coinsBefore you start looking at your options for saving and investing, you first need to conduct a thorough audit of your current finances. It is vital to know how much money is available to you, how much you need to hold back for living expenses, and what you have left to invest. It is important to have this information at hand before you start to seriously consider any options.

Stagger Fixed-Term Investments to Ensure You Have Cash

As a general rule with investing, the longer you are willing to part with your investment capital for, the greater the returns you can expect when it is returned to you. Of course, not having access to funds for a number of years, potentially even a decade or more, is not a viable option for everything.

However, there is a simple workaround that you can use in order to take advantage of those long-term high-return investments without compromising your cashflow in the meantime. All you have to do is spread your investments out over a number of different investments, each of which will lock up your money for a different length of time. This way, the money from the more short-term investments can sustain you until your long-term options pay off.

Combine Account Bonuses from Multiple Current Accounts

It isn’t just savings accounts that enable savers to grow their cash reserves. If you leave your money in a current account, you will receive interest on it. In fact, there are some current accounts out there that are advertised as being high-interest rate accounts, offering even more significant returns than usual. If you find the right account, the returns can be very appealing indeed.

One thing that you need to keep in mind, however, is that most of these current accounts will come with a minimum deposit requirement. In other words, if you don’t deposit a certain amount every month then you will lose access to the higher interest rate.

You can take advantage of the savings potential of multiple current accounts by moving your money between them strategically. For example, if you have one account that requires a £1000 deposit each month and another that requires £500, you could have your wages paid into the first account and then transfer £500 into your other account. Depending on the terms of each account, this can be a more efficient way of growing your money.

Start Investing with An ISA

An Individual Savings Account is a great choice for anybody who is planning on investing up to £20,000 over the course of the tax year. An ISA enables you to enjoy capital gains and income tax on any profits that you make from money saved in your account.

If you think that an ISA is the right vehicle for you to start investing, check out Willis Owen for more information on their flexible stocks and shares ISA. You will find all the information you need on their website; there are details here to help you start investing. Because Willis Owen’s stocks and shares ISA is flexible, you can withdraw money from it throughout the year, provided that you repay it within the same tax year.

Choose Compound Interest

Lots of people assume that any interest they earn on their savings will automatically be paid into the same account as the money that earned the interest, meaning that the next time interest is added it will include the last interest payment in the total. This is known as compound interest and unfortunately, not every account works this way.

Many savings and investment accounts will instead pay your interest earnings into a separate account, meaning that the interest you earn doesn’t include past interest. Before you commit to a savings or investment account, make sure that you read all the small print so you understand exactly how everything works. If a compound interest option is open to you then this is usually the best way to go. In some cases, you can take money that is paid into a separate account and reinvest it in other ways.

However you decide to go about saving your money, it is important that you know exactly what you are getting into. Remember that no investment is risk-free and that if you want to make bigger returns then you will have to take bigger risks. However, there are also plenty of low-risk, low-return options to consider. It all depends on your personal goals.