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How to maximise your savings

When you’ve worked hard to put money away, how can you make the most of your savings and help your money grow in the background?

Here are a few ways you can hopefully grow your money without making any extra deposits.

1. Look into switching banks and take advantage of sign-up offers

How long have you been with your current bank? What might have seemed like a good deal when you opened your account, especially when it comes to interest rates on cash savings accounts, may not be as good as what other providers can offer you now.

You might have even opened a savings account with your current bank simply because it was the easiest option, without shopping around to see if you could get a better deal somewhere else.

Have a look at what other providers have to offer. Check what their interest rates are as you may find that someone else offers better interest rates than you currently have.

There may be other benefits as well, such as generous introductory offers and even cash incentives for switching.

Just make sure you do your research and read the fine print before moving to a new bank or different type of account, so you can be sure you’re getting the right product for your financial needs.

2. Consider investing when saving for the long-term

If you plan to keep your money saved for at least five years, investing your savings rather than keeping them in cash might be a good option for you.

While investing in stocks and shares can seem risky, especially if you’ve not done it before, money invested in the stock market has greater potential to grow over the long term compared to money saved in cash savings accounts.

When you save your money in cash, it grows by earning interest. The amount it increases by depends on how high the account’s interest rate is.

Your balance can’t go down, but if the interest rate on the account is lower than how much the cost of living goes up by, you might find the money you save might not buy you as much in the future as it can now.

Money invested in stocks and shares can go up or down with changes in the stock market so there is a chance that when you need your money it might be worth less than you’ve paid in. It has more potential to grow than it would if you put your money in a cash savings account to earn interest, but this isn't guaranteed.

You don’t need to know how to play the stock market to invest your savings. Many savings products, such as ISAs, are available as stocks and shares products. You’ll be investing in a fund that buys shares in a variety of assets, and you can even pick a low-risk fund if you’re wary of investing.

3. Make the most of the tax benefits of ISAs

Whether you’re saving in cash or investing in stocks and shares, if you put your savings in an ISA, you won’t need to pay any tax on returns no matter how much your money grows by.

That’s because ISAs are tax-free savings accounts. However your money grows, whether that’s by building interest or investing, there’s no tax to pay.

You can put up to £20,000 into ISAs each tax year, and you could even split this amount between cash and stocks and shares ISAs.

You can also open a junior ISA to save for your children! Junior ISAs have their own limit of £9,000 a tax year, so you can save this on top of your own £20,000 ISA allowance.

4. Consider a financial product with a government bonus

If you’re saving to buy your first home or putting money away for retirement then a lifetime ISA could help you make the most of your savings, as the government will top up everything you save in a lifetime ISA by 25%!

You can put in up to £4,000 a tax year in a lifetime ISA, meaning there’s an extra £1,000 government bonus available every year.

There’s a catch, though. You have to use your lifetime ISA to buy a first home, or wait until you’re 60 to withdraw your money. Otherwise, you’ll be charged a 25% government withdrawal fee on the full amount you withdraw.

You must be between 18 and 39 years of age to open a lifetime ISA. You can also choose to open either a cash lifetime ISA, which grows by earning interest, or a stocks and shares lifetime ISA, which invests your money on your behalf.

They can be paired with other savings products, like stocks and shares ISAs, if you have other savings goals as well.

5. Leave your money saved or invested for longer

The longer your money is saved in an account, the more it’s likely to grow.

If you’re saving in cash, accounts that ask you to keep your money in for longer tend to offer higher interest rates than those that let you save for shorter periods of time, such as easy access savings accounts.

However, it’s worth bearing in mind that if you choose a fixed interest rate when you open a cash savings account, this rate won’t change with the market, which means you’ll miss out if overall interest rates start going up.

While there are no guarantees, money in stocks and shares is more likely to grow if it’s left invested for longer. If you’re saving in an investment account, such as a stocks and shares ISA, leaving your money invested for longer makes it more likely that you’ll be able to ride out ups and downs in the stock market.

Stocks and Shares ISA

Why not start saving with a OneFamily Stocks & Shares ISA?

With our Stocks & Shares ISA, you can invest up to £20,000 a year and pay in as little as £25 a month, making it a great option to grow your savings!

Our Stocks & Shares ISA

Our Stocks and Shares ISA invests in stocks and shares. This means it has good long-term growth potential, but the value of your investments could go down as well as up so you could end up with less money than you've put in.

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