How to get the most out of your savings

Although many people put money aside for their future, many also find themselves disappointed at the slow growth rate of their nest eggs, especially if it's less than they were promised. That's why it can be extremely beneficial to look beyond your standard savings account into options that offer a higher interest rate without carrying extra risk.



When you set up any new type of savings account, you'll be required to pay in money - though depending on the account you're opening, it may be a minimal amount. Of course, the more you pay in, the faster you can start gaining interest on your savings. You should also check whether you are required to make regular payments in order to benefit from greater interest, or whether the account terms are more flexible.



Bank savings accounts aren't the only option for generating interest on your funds however, and ever more people are looking into alternatives to earn higher returns - including investment options. While trading on the stock market can carry a high risk, especially if you aren't a financial expert, there are some options that offer high rates of return for relatively low risk, such as stocks and shares ISAs.

Not that you have to put your valuable savings at risk when opening an ISA though, with a cash ISA being a much more preferable option for many due to the tax-free earnings available. During your first tax year, you'll be able to save up to £5,100 into your cash ISA, and the limit will grow each year.



Other high-interest saving options include money market accounts, which typically carry a higher minimum balance than standard savings accounts but make up for this in the interest rates offered. You will still be free to make withdrawals from these accounts when needed, although some may place limits on the amount or frequency of withdrawals permitted.



CD (Certificate of Deposit) accounts can sometimes offer even higher interest rates, though you will usually be required to leave your money in the account for the duration of the term, or risk paying penalty fees for making withdrawals. CD accounts also usually offer a fixed interest rate, which can be an effective way of safeguarding your finances during uncertain economic times.



Whichever type of savings account you opt for, you could see your savings grow at a considerable rate simply by setting aside a small amount from your salary each month.



The author of this article is a part of a digital blogging team who work with brands like Northern Rock. The content contained in this article is for information purposes only and should not be used to make any financial decisions.