Now is the time to be saving

By Peter Thompson. Published on June 9, 2008 This post currently has no comments.

If high oil and food prices are starting to send shivers down your back, then there is at least a small nugget of good news today - there are some excellent savings deals starting to emerge.

With the cost of living soaring, it is becoming more difficult to save regularly, but if you can put some money aside each month, then some accounts are paying very high interest to tempt you.

High interest savings accounts

Take the Halifax, for example. if you can save between £25 and £500 per month, then the Halifax have a limited time deal available today that will pay you 10% interest during the first year.

There are strings attached, of course. That high headline rate is only available for the first year, you cannot withdraw your money during that year, and after 12 months, your funds will be moves into another account which will pay less interest.

Even with these restrictions, though, it shows you that banks are falling over themselves to win your savings business. Finding fixed rate bond rates of around 6% is quite easy. The Nationwide, for example, offer a rate of 6.6% for their fixed rate bond. This is also a limited special offer which can be withdrawn at any time, so hurry and apply if you wish to benefit from such good rates.

If you need better access to your money, then accounts such as Abbey’s esaver Direct account may suit you more than a fixed term bond. Abbey currently pay 5.75% interest for amounts up to £2M.

The esaver Direct is is an online only account, but Abbey will pay you a further 0.75% bonus if you don’t withdraw any money from you account during a twelve month.

Another way to save money, is to overpay your mortgage each month. This can have a dramatic effect on the total interest that you pay over the term of your mortgage. By overpaying your mortgage by only £50 per monthly you can save about £16,000 of interest over the term of your mortgage, depending on your interest rate and loan term.

So if you are feeling a bit gloomy about your personal finances at the moment, then saving even a small amount regularly can bring some cheer, at least in the form of some excellent interest rates for saving accounts.

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