It can be very difficult to know where to put your savings anyway, but when interest rates are very low it can be even more difficult. It is good to try to find somewhere that pays a really good rate of interest but it can be hard to find anywhere that does this these days.
There are some ways that you can get more interest on your savings account though. If you are prepared to tie your money up, you can get a better rate. Therefore if you find an account where you have to give notice to make a withdrawal then this will be likely to pay you more interest. Obviously you will need to be sure that you will not need the money quickly, if you want to get the interest. You tend to be able to withdraw the money without notice but you get a penalty, meaning that you will lose interest on it. Therefore if you do decide to use this sort of account, then it is a wise idea to make sure that you keep some money for emergencies in an instant access account and extra money in this account. As well as a notice account, you can consider a fixed rate bond. These fix the interest on the account for a period of time, perhaps a year or longer. This is a risk as you have to decide whether you think the interest rate will go up in that time period and if so whether you might be better putting your money elsewhere. Often a rate for a fixed rate bond is significantly higher than the Bank of England base rate so most people would be happy to take the risk and put their money in there.
Obviously these types of accounts will take some thought, you will need to make sure that you are happy with the money being in there. It is also wise to compare these different types of accounts to see which one seems to be the best for you. Compare the interest rates to see which one is most competitive but also consider other factors as well. You need to think about whether you are also concerned about the reputation of the account and company, whether you want to choose one that you already know and trust or are willing to try one that you have not used before. It can be worth reading some reviews so that you can find out what others think about the company and the product and this should help you to find a company that you trust.
Some people would rather try getting even more return for their money and they are willing to invest their money. Investments are riskier than savings because you are effectively buying something with the money, such as shares and then you have to sell them again if you want the money back. This means that you are relying on the item increasing in value before you want your money back. Most investments are held for a long time, to give them a chance to increase in value and so your money could be tied up for at least five years if not decades. There is also a risk element with investments. Some will decrease in value even over the long term and so you may find that you lose some of the money that you invested or possibly even all of the money that was invested. So whether this is something that you are prepared to do will very much depend on how much risk you are prepared to take. It is always wise to invest money that you can afford to lose, just in case something goes wrong and you should always use money which you do not need and cannot see that you will need in the short term as if you do cash it in you could end up losing out.
So the best place to put savings very much depends on whether you want to be able to get hold of the money quickly or are prepared to tie it up. It also depends on whether you are prepared to take a risk with the money and if you can afford to lose it. It is worth having a think about all of your choices and what will be the best for you personally.
