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Easy Access Accounts – You Don’t Always Need Them
Whether it is keeping the home running or preparing for unexpected car repairs, having the ability to deal with these sudden expenses is always a worry for us. Therefore, many of us choose to use easy access accounts, where we can instantly access money when we need it. In principle, it is a great idea as the convenience is something that wins many over but the reality is that they are not always needed.
There are some instant access accounts that come with an interest rate of up to 1.5% but notoriously, these accounts often come with a low-interest rate. Ultimately, this means that your money is not working as hard as it could. So, if you are trying to save, then this is not the kind of bank account that you need.
What Can You do?
Easy access bank accounts are simple and they make the entire process of saving money as uncomplicated as possible. However, the truth is that many of us don’t need all of our cash instantly accessible. Therefore, finding that perfect blend of instant access and fixed-term savings can really make a difference to your returns. So, you still get to have that emergency fund but you also get to benefit from better interest rates. As a result, you should consider splitting your savings into two.
This is money that you can put aside for anything that you would consider to be an emergency such as losing your job, car repairs or repairs to your home. So, in this account, you should look to keep anything between three and six months worth of income that you can access instantly.
Whether you are saving for a house, a wedding or a car, making the most of a fixed-term savings account is a great way of giving your savings a boost. You can keep your savings in this account for a period of time ranging from three months up to five years and in some case more. The idea here is to keep your money tied up for longer so that you can take advantage of the higher rate.
It is extremely important that we save our hard earned money but it is also important that you make it work for you. So, splitting your savings and ensuring that you find that perfect blend of both worlds will ensure that you have complete peace of mind while also preparing for your future.