INTERESTing

It’s fair to say that if you are a saver, you have endured many frustrating head scratching years battling to find an interest rate worthy of the effort. Interest rates have been at historically low levels for many years and are set to continue well into 2016.

 

I get asked about where to find higher interest rates all the time and there is no magic formula. However, hopefully the following might just over a glimmer of light in an otherwise very dark room.

 

1. £300.00 Lump Sum:

 

Bag a return of £124.53! 

 

For those with a small lump sum, one of the best deals on the market is the HSBC Loyalty Cash ISA, which pays £10.00 a month for up to 12 months on top of the 1.5% interest rate. To open the account you need to be a customer of HSBC's Advance Current Account, which requires a monthly payment of at least £1,750.00 a month (which does put the account off limits for lower earners). However, if you put the minimum lump sum of £300.00 into the account, you'll get a return of £124.53 (£42%) after 12 months.

 

 

2. £300.00 Monthly Saving:

 

Returns of £93.00 (+ £100.00 if you're a new customer)

 

Savers who can put away up to £300.00 a month could consider opening a First Direct 1st Account to access its regular saver account, which has a top rate of 6% for 12 months. If you're a new customer you'll also get a bonus £100.00 for opening a 1st Account.

 

You can pay as little as £25.00 or as much as £300.00 a month. If you save the full amount of £3,600.00 over the year you'll get a total return of £93.00 in interest after tax - or £193.00 (5.4%) if you count the opening bonus .

 

However, you can't make any withdrawals during the 12 months or else the top interest rate is lost. So the account is only for those who know that they won't need to access their cash for a year.

 

 

3. £5,000.00 Lump Sum:

 

Get £162.37! 

 

If you have a savings pot of between £1,000.00 - £5,000.00, the Club Lloyds current account pays a rate of 4% on the balance. This amounts to £162.37 after tax (3.2%).  The account is fee-free if you pay in at least £1,500.00 a month.  

 

 

4. £20,000.00 Lump Sum:

 

Earn £473.32!

 

If you have a larger lump sum, the Santander 123 current account is a good option. It pays 3% on balances over £3,000.00, which would give £242.66 on a £10,000 balance after a year and after tax (2.4%). However, you'll need to factor in the current account fee of £2.00 a month to give a total of £230.66 (2.3%).

 

If you keep the full amount of £20,000 in the account for a year, you'll get a return of £485.32 (after tax) and £473.32 after deducting the account fee (2.4%).

 

It's worth noting that you can also earn cashback of up to three per cent on direct debits, which have not been factored into this equation.

 

 

So there you have it……hopefully a few gems that might just help in finding a little interest in an otherwise very dry savings market.