Savings Rates: Getting Your Moneys Worth

Putting aside money for investment is not just for the purpose of saving but one also expects some amount of return since it is a kind of long term investment. The rates are therefore important and so are the tax benefits. The tax free amount is about £3,600 which is not always sufficient for many. High tax payers not only have their taxes deducted at source but also have some amount deducted from their savings. A basic rate of 20% applies. Presently, the NSI provides an interest return rate of 0.3 to 0.7% which is very low. Instead, there are several other tax free options available for people. For choosing bank accounts with the best savings rates, people have other tax free options like fixed interest savings paying. It varies from 1.25% to 2.25 % over a period of 2-5 years or index linked certificates that pay about 1% above inflation. If there is no inflation prevalent, you receive interest only at the rate of 1%.

Savings rates with other banks are on the rise like that of ING, ICICI etc. having interest rates of 3.2% and 4.6% for 3 years respectively. Post offices too offer bonds with a rate of 3.85% on a bond of 1 year. People interested in paying off debts can look for investments in mortgages or current or deposit accounts. The present rate of 3% increases to 5% for people paying higher taxes. Placing your money with the right bank and the right offer rates is necessary so that you get the appropriate amount which shall be worth it. If rates change and you find other banks offering better rates, do not hesitate to shift your account to the one that will be more beneficial. In the end, it helps you earn more returns.