Managing a savings portfolio
Getting the most from your accounts
If you have a large sum of money that you want to save, you'll probably not want
to put all your eggs in one basket. You'll probably need some flexibility in accessing
your funds and possibly some protection against fluctuating interest rates.
Here are some quick tips to help you get the most from our accounts.
Spread your savings
Spreading your savings across a number of different types of account can be a good
idea for several reasons:
- Access - you'll probably not want to lock all your money away.
A combination of easy access and fixed term accounts means you can withdraw some
of your money when you need it and take advantage of better long term savings rates
for the rest
- Staggered maturity - by using a number of fixed term accounts with
different terms, you'll have accounts maturing at different times. This means all
of your funds aren't tied in for the long term and you can more regularly take advantage
of new savings opportunities as they arise
- Interest rate volatility - fixed term accounts mean you know exactly
how much your savings will earn and over what time period. Interest on easy access
accounts will change. The key is to find the balance you're comfortable with.
Use your tax free Cash ISA allowance
No matter what type of saver you are, you shouldn't ignore your Cash ISA allowance.
At £5,640 for the 2012/13 tax year it may be a small part of a substantial
savings portfolio. But as the years progress you'll be able to shelter more of your
savings in ISAs. Over the long term, this can make a real difference to your savings
Watch out for charges
Remember, you could face a charge if you withdraw money early from a fixed term
account. As far as possible, try to only save what you can afford to lock away in
a fixed term account and only make withdrawals in an emergency. A single withdrawal
might have little impact but if you make regular withdrawals the charges could stack