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Improving
your cash
strategy

Don't miss out on better cash returns

Important information - Active Savings helps you make your own decisions and is not personal advice. Fixed term products generally only allow access to funds at maturity. Inflation reduces the future spending power of money.

Everyone needs cash

Yet many of us neglect our cash savings.
If that sounds familiar you're not alone.

Holding the right amount of cash is key. You'll need some set aside for emergencies, but you might also be saving for a goal or event such as a new car or a wedding. Or, you might just want to keep some cash aside ready for when the right investment opportunity comes along.

Out of the savers we surveyed 40% have never switched their savings*

Make it go further

Many are missing out on higher rates. According to our research 40% of all savers we surveyed have never switched their savings. Almost half don't even know what rate they're getting*.

An effective cash strategy can boost your returns and help you reach your goals sooner.

*HL Survey, October 2018, 2,008 nationally representative respondents.

Building a savings portfolio

Start by thinking about your short, medium and longer-term goals.

This will help you decide how to spread your money to ensure you earn the best return possible, while having access when you need it.

Short term

Cash for emergencies

Financial planners generally suggest keeping between three to six months’ worth of income in easily accessible cash, in case of an emergency like a leaky roof or losing your job.

Medium term

Cash for known expenses

This could be anything from a new car, a tax bill, school fees or even a property purchase. If you know when you’re likely to need the cash you can strategically use fixed term savings to get a better rate than easy access savings.

Long term

Inflation-beating returns on cash

If you want to earn competitive rates of return without any risk to the value of your capital, longer term fixes can really help.

Short term

Cash for emergencies

Financial planners generally suggest keeping between three to six months’ worth of income in easily accessible cash, in case of an emergency like a leaky roof or losing your job.

If you’re in retirement, you might want to have more as your income may be lower so it may take longer to build your savings back up.

Keeping this pot of cash in an easy access account gives you the freedom to withdraw whenever you need.

Easy access rates are variable. While instant access accounts allow you to instantly withdraw your money at any time, with Active Savings withdrawals usually take up to one working day.

Average instant access rate
including unconditional bonuses

0.43% AER | Gross

Source: Bank of England, data correct as at 15/04/2019

Easy access rate offered
through Active Savings

1.25% | 1.24%
AER | Gross

Medium term

Cash for known expenses

This could be anything from a new car, a tax bill, school fees or even a property purchase. If you know when you’re likely to need the cash you can strategically use fixed term savings to get a better rate than easy access savings.

For example, if you’re saving for a wedding in a year’s time, you could use a one year fix. Depending on the amount you save, you could even earn enough interest to pay for an extra couple of wedding guests. But remember, fixed term products generally only allow access to your money at maturity.

Fixed term savings can have different minimum balances and can be added and withdrawn at any time, so please check carefully before making your choice.

Average 1 year fix rate savers earn

0.98% AER | Gross

Source: Bank of England, data correct as at 15/04/2019

Top 1 year fixed rate
offered through Active Savings

1.96% | 1.96%
AER | Gross

Long term

Inflation-beating returns on cash

If you want to earn competitive rates of return without any risk to the value of your capital, longer term fixes can really help.

If you fix for up to 5 years you can earn an inflation beating rate on your cash. Remember inflation erodes the spending power of cash, and the inflation rate can change over time.

Top 5 year fixed rate
offered through Active Savings

2.55% | 2.55%
AER | Gross

Market data for 5 year fixed rates unavailable from Bank of England

Invest for potentially higher returns

If you’re happy with the higher risks involved, it’s also worth considering the stock market. By investing for five years or more, you have the time to hopefully ride out the ups and downs, giving you a better chance of getting better returns than cash products. But unlike the security of cash, investments fall in value as well as rise so you could get back less than you invest.

Find out more about investing

How hard can it be?

Building an effective strategy can be a hassle. To chase good rates you'd need to save with several different banks.

That's more paperwork, more passwords to remember and more accounts to manage.
And not everyone has the time.

We can help

That's why we launched Active Savings

It lets you pick and mix easy access and fixed term savings from a range of banks and building societies, through the convenience of one online account.

And once you're set up there are no forms or paperwork to fill in when moving money around. So you can manage your cash all in one place, with just a few clicks.

Getting started only takes a few minutes.

Find out more about Active Savings

Open an account

It's a great product and with a variety of banks offering competitive rates with varying options like fixed term and instant access to your money, the choice is truly yours.

MR OMANG, Leicestershire

This website is issued by Hargreaves Lansdown Asset Management Limited (company number 1896481), which is authorised and regulated by the Financial Conduct Authority with firm reference 115248.

The Active Savings service is provided by Hargreaves Lansdown Savings Limited (company number 8355960). Hargreaves Lansdown Savings Limited is authorised by the Financial Conduct Authority under the Payment Services Regulations 2017 with firm reference 751996 for the provision of payment services. Hargreaves Lansdown Asset Management Limited and Hargreaves Lansdown Savings Limited are subsidiaries of Hargreaves Lansdown plc (company number 2122142).

AER shows what the interest rate would be if interest was paid and compounded once each year. It helps you compare the interest rates on different savings products.

Gross is the interest rate without any tax removed. Interest is paid gross. You are responsible for paying any tax due on interest that exceeds your Personal Savings Allowance to HM Revenue & Customs.

Some banks offer a high introductory or bonus rate which drops to a much lower rate after a short period of time. With Active Savings, our partner banks simply offer consistently good rates.