Published on: 16 Oct 2018
A recent survey by Moneyfacts found that 77% of people asked thought savings accounts were too complicated. This may be one of the primary reasons why customers rarely switch.
But it doesn’t have to be difficult. Many banks will be happy for your business, so the process of switching is easier than it ever has been before. And, armed with these tips, you’ll see why shopping around will help your savings go further.
Switch savings accounts
The average instant access savings account pays 0.51% interest. Not too good. But the best pays a whopping 1.4%, which means more pounds in your pocket when that interest is calculated.
There is no official switching service to move from one account to another, so you’ll need to open your new higher earning account and then transfer your savings into it. However, once you’ve got your savings sorted, you’ll notice the difference.
Switch cash ISAs to boost tax free savings
Remember to keep an eye on the interest rate of your cash ISA. Switching ISAs is a little more complicated than a regular savings account, but the tax free savings make the change even more worthwhile.
If done correctly, you can transfer savings from one cash ISA to another (with a better interest rate of course!) without that counting against your yearly ISA limit. So you’re free to keep storing your savings where they work best.
Just make sure your new cash ISA accepts transfers before you open it, and you’re good to go.
Check your stocks and shares ISA
It’s not a good idea to continually swap your stocks and shares ISA around, as that may incur trading fees and lock in any losses. But that doesn’t mean you shouldn’t switch if you’re unhappy.
A provider with lower fees, charges or commission, or a wider range of investment options, may be reason enough to switch. Generally, your options to switch will be a cash transfer, where your investments are sold and then the cash reinvested by the new provider, or as a stock transfer, where you retain the portfolio which is transferred in total to the new platform. Be aware that a stock transfer may take up to five or six weeks, but you won’t incur trading fees.
As always, research your options thoroughly before making a decision.
Get a deal on a current account
Current accounts tend to see the most use, with money flowing in and out every month. Many banks offer bonuses such as cash incentives for switching. Or, if you find yourself in overdraft often, consider an account with lower overdraft fees.
Many banks back the Current Account Switch Service, which means they’ll take care of moving all your money, direct debits, and standing orders to the new account. So there’s no reason not to grab a better deal if you see it.
Make your decision based on how you run your day to day finances, and you’ll soon see those savings trickle in.
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