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Investment Times

Employ your cash

| 14 December 2018 | A A A
Employ your cash

No recommendation

No news or research item is a personal recommendation to deal. All investments can fall as well as rise in value so you could get back less than you invest.

Everyone needs to have some cash set aside. Generally, you should see it as an insurance policy to cover unexpected expenses like a broken boiler or leaky roof. But you can use it to plan for known future expenses too.

If you run your own business you probably need to hold a bit more cash than those in regular employment. You might have irregular earnings, so some months you need to top up your income from your savings. Or you might need working capital to keep your business running while you’re waiting to be paid for some work. Then there’s the headache of keeping enough cash to make sure you can pay your tax bill when the time comes.

But what should you do with any cash you have set aside? And how can you make sure it’s working as hard as possible for you?

Effective money management

The first step is making sure you have enough cash set aside for emergencies. This should be held in an easy access savings account, where you can get your hands on it quickly if you need to.

For the cash you don’t need straight away, think about fixed-term savings. They can help you earn a good return on your cash, but give you access when you need it in the future.

Terms are typically from three months up to five years, and generally speaking the longer you fix for the better the rate.

Think about your tax bill payment, any money you set aside in this tax year to pay your next tax bill won’t need to be paid to HMRC until January 2020. You could put any money set aside in a 12 month fix, which can currently pay around 2% interest. That’s £200 interest on every £10,000 saved, effectively earning you a bit of a discount on your tax bill.

Improve the way you save with Active Savings

Our new Active Savings service could help you make more of you cash.

It lets you pick-and-mix fixed-term savings from typically three months up to five years from a range of different banks and building societies, through the convenience of one online account. You can move your money around with just a few clicks. No forms, no paperwork and no hidden surprises, making it easy to make sure your cash is working hard for you.

Improve the way you save and join Active Savings.

Find out more

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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 wholly owned subsidiaries of Hargreaves Lansdown plc (company number 2122142).

The value of investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks and commitments. This website is not personal advice based on your circumstances. So you can make informed decisions for yourself we aim to provide you with the best information, best service and best prices. If you are unsure about the suitability of an investment please contact us for advice.