You are here: Home - Saving-Banking - News -

Five tips to make the most of your bank account and savings

Written by:
Interest rates have been rising for the past year, and while this will be a bitter blow for mortgage and credit customers, for savers it means more competition and better deals.

Reena Sewraz, Which? Money expert, said: “Many people are feeling financial pressure at the moment. However, there are steps you can take to get the most from your bank, by saving and even earning money.

“Search around to find the best savings account for you. If you’re looking for a new account or are thinking about switching providers, you might be able to get yourself a switching bonus of up to £200.”

Here are five tips from consumer champion Which? on how to make the most of your bank account and cash savings:

1) Consider easy access and fixed rate deals

There are various different ways to save your money, including regular savings accounts, instant or easy access, as well as fixed-rate bonds. When choosing between them, consider how often you’d like to be able to deposit and withdraw savings.

Currently, the top paying penalty-free easy access account is offered from fintech firm Chip which pay 3.15% AER. If you are able to tie money up, higher interest rates are available with fixed rate bonds. Sharia-compliant Al Rayan Bank which pays an expected profit rate rather than interest rate currently offers three market-leading rates.

These are 4.31% on a one-year bond; 4.47% on its two-year deal, and 4.57% for those locking into a three-year term.

2) Bag up to £200 by switching banks

If you want to leave your current banking provider, check if any prospective banks are offering switching deals. It takes seven working days and sees all your existing direct debits and standing orders moved, so you don’t need to worry about setting these up manually again.

NatWest is currently offering its highest-ever switching incentive for new and existing customers who move to its current accounts. Those thinking of switching to the NatWest Select and Reward current accounts could pocket £200 for the move. You can also get £200 if you switch to a TSB Spend and Save account, or Spend and Save Plus, using the Current Account Switch Service (CASS) by 24 March.

However, it’s vital to read the terms and conditions so you know exactly what you are signing up for.

3) Packaged bank account perks

Packaged bank accounts offer perks such as travel insurance, breakdown cover or mobile phone insurance, in exchange for a monthly fee. Packaged accounts can offer a cheaper and more convenient way to insure yourself, but read the terms and conditions carefully.

Remember that these accounts are only worth having if you make the most of the benefits and services you’re paying for.

4) Get rewarded by using your account

Cashback can help you make money on your spending. Many banks and building societies offer cashback on monthly bills and loyalty rewards as an incentive to open or retain an account.

Some pay as much as £20 per month. The Santander 1|2|3 account (£4 a month fee) pays up to 3% cashback on selected household bills, capped at £5 for each of the three spending categories each month.

5) Check the overdraft fees on your bank account

Going overdrawn can be costly, especially as some accounts charge up to 39.9% EAR (effective annual rate). If your bank charges a high rate of interest, it could be worth checking to see if you can switch to an account that offers a lower one – particularly if you use an overdraft regularly. Nationwide currently offers a free authorised overdraft on its FlexDirect account, subject to status, but this only lasts for the first year.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Everything you wanted to know about ISAs…but were afraid to ask

The new tax year is less than a fortnight away and for ISA savers or investors, it’s hugely important. If yo...

Your right to a refund if travel is affected by train strikes

There have been a wave of train strikes in the past six months, and for anyone travelling today Friday 3 Febru...

Could you save money with a social broadband tariff?

Two-thirds of low-income households are unaware they could be saving on broadband, according to Uswitch.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week