When it comes to saving money, making a good return on your invested funds is key for savvy account holders.
Firstly, making sure you choose the right account for you. If that’s an ISA, you will most likely be making sure you are getting the best ISA rates available so you can be sure interest on your savings is high as possible.
When you’re confident that your chosen account will get you those best cash ISA rates, then it’s time to think about how to maximise your savings with good financial planning. This might include the help of a savings calculator, taking financial advice from an expert, and then going on to set goals to work towards.
We’ve compiled a few tips on how you can get the most out of your savings, in particular, your ISA.
ISAs have a limit of how much can be deposited into them within a calendar year. This can be saved into one ISA or spread among others, and the current limit is set at £20,000.
The number one way to make the most of your ISA is to ensure that you meet this limit, or at least get as close as you possibly can to it each year. Anything unused from one year will not carry over into the second, so ensuring that your ISA is as full as possible is a high priority.
Sometimes, an ISA can be restricted with how many times it can be deposited to and withdrawn from. This can make it difficult to track or optimise how much money goes in to the account, especially if you make frequent withdrawals.
Having a flexible ISA can be beneficial when trying to make the most of your account, especially if you’re dealing with larger sums. This allows your cash to be more liquid and easily moved around, compared to inflexible ISAs where each contribution and replacement of funds counts toward your ISA allowance.
Some ISAs will offer account holders a trade-off when it comes to the availability of their funds. Accounts can be restricted throughout the year to place a limit on how many withdrawals can be taken, or they can introduce a notice period for when money can be accessed by the account holder.
While these limitations can make money less immediately accessible, if you find yourself not needing as prompt access to your funds, they can sometimes offer a more competitive return via increased interest rates.
In this case, account holders sacrifice the availability of their money in favour of a higher return. If you have good financial discipline, a limited account, such as a Reward ISA, can be worthwhile.
It goes without saying that regularly contributing to your savings can make it easier to meet your savings goals and maximise the effectiveness of your overall savings portfolio.
Compared to occasional lump sum deposits, which are hard to manage and tend to fluctuate in size, sticking to a regular regime of frequent, slightly smaller deposits can see your savings gradually build over time, as opposed to less predictable larger ones.
Read more: How to Develop a Saving Habit : Good Financial Habits to Develop
If you happen to have an older ISA which still has funds in it, you’d be right to question whether this account is still operating as well as it could. If your account is especially old, you could be getting a lower return than you might think.
Thankfully, transferring an ISA from previous years is a valid option available to account holders looking to make the most of their ISA savings. This could be a transfer to a different account offered by your existing supplier, or a new account from another supplier. Doing so can help ensure that your funds from prior years are still earning as much return as possible, without infringing upon your current year’s ISA allowance.
Read more: How to transfer an ISA
Saving money is always easier when you have an end goal in mind. Compared to saving blindly, being able to visualise and work towards a clear goal can help make your savings progress more meaningful. These goals can be minor, like buying a new piece of tech or a gadget for the kitchen, or for more substantial things like a family holiday, or even your retirement.
Being clear about what you are saving for can also help you to decide which savings account is right for you. For example, if you have a shorter term goal you will need more access to your money, but if what you’re saving for is far in the future – maybe your retirement – you can afford to lock your funds away with limited access for better returns.
So, while you top up your savings accounts, ask yourself: what (or who) are you saving for?
If you’re dealing with a large amount of savings, you could consider a stocks and shares ISA.
Saving in this way allows greater risks to be taken for a potentially higher reward in the end. Just remember that your savings can go up or down throughout the year, making them less predictable than other types of ISA. It’s worth seeking independent financial advice if you need further information.
Some of the fresco audience profiles mentioned stocks and shares, so thought to include it. Though, I don’t know if Aldermore offers these accounts.
Depending on your financial goals, we have an ISA that’s up to the task.
If you have good discipline with your savings, a Reward ISA can help you make the most of your balance by offering a higher interest rate, provided you stick to the withdrawals.
Looking for a consistent return every month? Fixed rate ISAs provide a guaranteed return by locking the interest rate for the duration of your agreement. If you need liquidity, however, our Cash ISAs allow you to add and withdraw funds as often as you’d like.