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The record breaking 0.5% interest rate from the Bank of England makes saving pretty tough going right now. The rate was designed to help people struggling to pay back loans and mortgages so by that measure the low rate is having the desired effect. The number of people in arrears on their mortgage fell by 4% in the last quarter of 2009. This super low rate is also in place to encourage us to hit the supermarkets, high streets and car show rooms and spend. Consumer spending is one of the ways chosen by our Government to stride on out of of recession. But with inflation at an all-time high of 3.5%, we don''t want to spend now when everything is so much more expensive. We wouldn''t have got into such of a mess if we had all saved a little more and spent a little less like our grandparents'' generation, who used to save for a rainy day. This might not lead to such glamorous lifestyles but it is definitely the safe option. Saving therefore is a good idea that should be encouraged but what can you do with your money right now to make it work a little harder for you? Although it may feel safer, storing your money under your bed is not the best way to safeguard your cash. Because inflation is so high, the value of your under-the-bed money will actually decrease. So failing this approach, the only other way to go is into a savings account. If you want a mortgage right now you are spoilt for choice, but finding a savings account that is actually worth the paper it is written on is a little more challenging. However, you do have options. You can put your money in an instant access saver account, reward savings, bonds or an ISA. But what''s the difference? It''s no surprise that an instant access account lets you access you money any time, 24 hours a day. This is a great way to start saving if you have never done so before and your current personal and financial circumstances are not guaranteed. The rates are usually lower than for more long-term limited access accounts but the flexibility can often outweigh this. Reward savings do exactly what they say on the tin; reward you for meeting your target. If you have a particular goal in mind, such as buying a new car or getting together a deposit for a home, then these accounts should work really well for you. By leaving your money alone and or saving a regular amount each month the bank will reward you for your hard work. Although perceived to be more complicated, ISAs are actually very straightforward and provide you with several bonuses. Each financial year we get an ISA ''allowance''. Currently, this is ?7,200 for the under 50s and ?10,200 for over the 50s age group. This allowance is completely tax free so any profits you make you keep 100% of them. The money can be divided between up to two ISAs one cash and one stocks and shares. The combined value must not exceed ?7,200 and no more than 50% of this can be placed in a cash ISA. Finally, fixed rate bonds. Your bank will invest a lump sum on your behalf in bonds which are then traded on the stock market. You will earn a monthly ''salary'' of interest from this bond and good returns when it matures.
Article Source: http://www.casinoarticlessite.com
Milissa Darnstaedt is the author of this article. Santander have a range of great savings accounts available online today.
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