Up until the recession there were many people that had no idea about the rate they received. Today this is not really the case, which is a good thing. Too many people took their savings for granted and what they should have been doing was tracking their rates and switching accounts so that they earned as much money as possible. Here, we will explore why it is a good idea to check for the best interest rates on savings regularly.
All you need to do is look at the different rates that are available to see the benefits you can get by switching. Unless your money is tied into a bond, you can guarantee that if you have not done a review for a year or more, then it is highly unlikely you will be earning top rates of interest. However all it requires is a bit of research and a small amount of time to switch from one account to the other.
Just about every leading analyst will tell you to shop around for the best interest rate. Some even compare taking the time to find the right account like working overtime. Finding the correct savings account should take no more than two hours and when you see the potential results, you will realise it is well worth it. If you have £10,000 in an account earning 0.5% (variable) you only earn £50 a year. Finding something that offers 3% (variable) instantly earns you an additional £250 a year and as this will only take you an hour (on average) you've essentially just earned £250 for an hour’s work, and that is good work if you can get it.
If you have no plans to access the money for an extended period of time or only need to make one or two withdrawals, then the rates on offer are higher than instant access savings accounts. Those offering saving accounts offer a better rate for longer-term bonds for a number of reasons. In the above example, a three-year bond could earn you 4.5% per annum. That is £450 if you have no intention of using the money in the next three years, a huge difference if you compare it to any variable account.
Spending a short amount of time every year is often the best way to make sure your money is working for you.