This article contains a list of money saving and investment tips. They are in no particular order and just appear as the author thinks of them
Credit cards can be a great money saving vehicle, as long as you pay them off on time. If you purchase an expensive item on the first of the month, then typically you will have 30-60days before you start paying interest on the purchase. This gives your hard earned cash a little bit more time to earn interest in a high interest savings account.
Credit Cards
Most credit card companies offer some type of reward system, this is typically equivalent 0.5-1% cashback. It is best to choose cards that give you the rewards in real money, rather than in tokens or points for savings on some other goods and services. Otherwise instead of pocketing a couple of hundred pounds in cash you may up spending out on that all new lean mean grilling machine as you have earnt 50% off through George Formans credit card company….
Credit Cards – Company Expenses
If you end up claiming a lot of company expenses then try to put all purchases on your credit card, and make sure you claim for the expenses as soon as possible. If your company is quick at refunding expenses you may find that you get the cash before you have to pay off the credit card. Yet more interest to be earned in that high interest savings account. Further more, if you have a credit card with a reward points scheme you will earn money on expenditure that isn’t even yours!
High Interest Savings Accounts
There are a number of accounts that have been recently advertised with headline interest rates. 7-10% interest is now becoming more common place. However these deals aren’t quite as good as they seem. You can usually only put a maximum of £”50 a month into the account, and at the end of the year it will typically be swept into a current account or equivalent. This means you have to keep on your toes and make sure you swap to another account once the initial interest rate period expires.
Now what about that maximum investment per month? Even if you invested £250 a month for a year into a 10% account you will only end up earning £135 pounds in compounded interest. If you are a tax payer this is reduced to £105, or a high taxpayer would earn a measly £81 pounds. Okay, so it is better than nothing, but it is hardly a massive pay out by the banks and building societies.
You will probably be better off in the long run by choosing a good, consistently high paying online savings account, such as that offered by Nationwide or Halifax. These pay out in the region of 4.5%-5%, but their annual investment limit is normally around £50,000 a year, rather than £3,000 a year. Also with a proven track record of high interest rates you wont have to chop and change your accounts every year. Saving you lots of time and hassle.
Cash ISA’s
Invest in cash ISA’s! Especially if you are a higher rate taxpayer, but even if you are exempt from taxation you will find that they offer a good rate of interest, and will protect your interest earnings if you end up paying tax in the next few years. Also don’t forget that you can only save £3000 a year into a cash mini-ISA, so you need to make sure you make good use of your tax free savings each and every year to be able to build up a good tax free nest egg.
Mortgages
If you are on a variable rate mortgage see if you can tie yourself into a discounted mortgage. Banks and building societies are offering some eye-popping rates at the moment, but make sure you checkthe small print. A 2% interest rate in the first year may sound great, but check that it doesn't increase to 7 or 10% interest in the 2nd to 5th year.
Some financial research has shown that statistically you are most likely to be best off with a 2 year fixed rate mortgage, and then remortgage every 2 years. This may seem like a lot of hassle but it could save you hundreds of pounds each year.
Visit http://www.whatprice.co.uk for more money saving advice.
Article Source: ezinearticles.comMoney deposited in a savings account is only intended to stay in the bank for a relatively shorter time span. This account usually offers much lower interest rates than most bank accounts. But still, like many other accounts, it accumulates interests. The rate of which is largely dependent on the conditions provided by the bank.
Savings accounts are normally maintained by commercial banks, credit unions, loans and savings associations, and some mutual savings bank that are offering interests that can never be used as money. However, the account may be utilized by writing a check.
These accounts allow customers to use parts of their liquid assets, which may be used for any transactions. But before a savings account is used, the balances in the savings account must first be transferred to checkable deposits or transaction deposits or currency. But due to the simplicity of transferring the saving accounts, they are often termed as "money".
Though the use of checks is often not allowed, withdrawals are still easier when done using the savings accounts. The Money Market Deposit Account or the MMDAs on the other hand may restrict you on a limited number of transference of accounts and withdrawals.
With the advent of the Internet comes the development of a new system of banking- the direct-to-consumer banking system. This particularly addresses online savings accounts. Direct-to-consumer system allows direct access to savings accounts from the traditional bank online where money naturally transfers by means of electronic bank transfer. There are two types of banking institutions that create and allow this form of transaction- online-only banks and the traditional banks.
Online-only banking is the answer of the entrepreneurs to the growing consensus of the general public of who usually make banking transactions through the internet. These banks tried to accomplish what real banks have done. They offered almost the same spectrum of products that traditional banks have but offered them on consumer-friendly deals- high interest rates and low fees.
Online savings accounts often offer significantly higher rates of interest as compared to the contemporary savings account. This deal may be attributed to the fact that lesser expenses during online processing and that online market is naturally rate-sensitive.
Sadly, the majority of the consumers are not yet prepared to this new treatment in banking. This in effect, brought down most of such banks.
But by the end of year 2000, ING launched an optimized form of online-only banking. This was rather successful and brought great increase in the online banking industry. They created a much simpler savings account transaction that pays higher rates than the traditional banking. But this does not permit the use of ATM cards, checks, and other services. It was only intended as an account for which your money may be safely guarded.
For almost three years, ING had no other rivals in this system of banking. But recently, many other banking institutions have followed suit. Some were the pioneers of the online-only banking who eventually died down during the course yet returned to beat the market share ING has. Some of these banks offer the same services with that of the ING programs. Most have the same principle of high interest rates and no unnecessary frills.
One notable new entrant is the VirtualBank. This targeted the high-end techy society yet they offer much lower rates as compared to the ING Bank. Thus they gained some consumers.
Eventually, the industry expanded sometime in 2003 until 2004. And by the year 2005, savings account virtually revolutionized banking by means of online-only banking.
Robert Thatcher is a freelance publisher based in Cupertino, California. He publishes articles and reports in various ezines and provides savings accounts resources on http://www.your-saving-account.info.
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