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5 tips to boost cash savings

Making more of your savings could be easier than you think with these top tips.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

Everyone needs cash, it’s vital to cover day-to-day expenses and unexpected costs. But having it sat earning little-to-no interest is a sure way to let rising prices eat away at its value.

If you’re looking for an easy way to improve your cash returns, here are our five tips.

Remember this article isn’t personal advice and inflation will reduce the value of money over time. If you’re not sure, please seek advice.

1. Check your rates

It’s worth checking what rate you’re currently getting on your cash savings. If you’re getting a poor rate, you don’t need to settle for it.

The average instant access rate is just 0.43%, but there are much better rates available on the market. You can get nearly three times more on easy access savings products through our service, Active Savings.

Instant access savings accounts from high street banks and building societies typically let you instantly withdraw your money at any time. With Active Savings, withdrawals from the easy access products usually take up to one working day.

2. Watch out for bonus rates

Some banks will offer an introductory bonus rate when you sign up for a new account. This will usually be available for a period of up to a year, after which the bonus will end and your rate will drop.

You shouldn’t automatically discount savings products which offer bonus rates, but you do need to treat them with caution.

Unless you know you’re going to move your money on a regular basis, it might be worth looking at accounts which pay a slightly lower headline rate, which don’t have a bonus but just pay a good consistent rate.

3. Get your savings in a fix

For money you don’t need to access immediately, but don’t want to invest for the long term, fixed-term savings products could be the answer to improving your returns.

You can normally fix for anything from three months up to five years, and the longer you fix for, the higher the interest rate usually is. For example, you can currently get as much as 1.90% AER/Gross* on a three-year fix through Active Savings, but remember you can't usually access your money until the end of the fixed term.

4. Make the most of your personal savings allowance

Introduced in April 2016, the personal savings allowance (PSA) lets lots of people earn up to £1,000 of interest each tax year before they pay any tax.

The PSA drops to £500 for higher rate tax payers and additional rate tax payers don’t get a PSA at all. Nonetheless the PSA means that lots of savers don’t have to worry about paying any tax on their savings interest.

Remember if you’re married or in a civil partnership you could split your savings with your spouse to effectively have a combined PSA of up to £2,000.

The personal savings allowance is calculated using UK, not Scottish, income tax bands. Tax rules can change and benefits depend on personal circumstances.

5. Become a savvy saver by laddering your cash

Think about putting money in fixed-term products starting at different times, or with different end dates.

You’ll probably get a much better rate overall, and can time your cash to come back when you think you’ll need it.

You could add a new fixed-term product monthly, which also lets you be flexible with how much you chose to save, or not.

Find out more about savings strategies

Make more of your cash with Active Savings

If you’re looking to make more of your cash savings, our Active Savings service could help.

Pick and mix easy access and fixed-term savings products from a range of different banks and building societies, all through the convenience of one online account.

And once you’re set up you can move your money around with just a few clicks. There are no forms, no paperwork and no hidden surprises. Just simple, fair saving so you always know what rates you’re getting.

Discover Active Savings

*AER (Annual Equivalent Rate) 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 means the interest rate without any tax deducted. Interest is paid gross. You are responsible for paying any tax due on interest that exceeds your Personal Savings Allowance to HM Revenue & Customs.

Expected profit rate – Islamic banks offer an expected profit rate, rather than interest on their savings products, in order to comply with Sharia banking principles.

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).

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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