Looking after your money in the right way will help it go further. Learn how to manage your savings to reach your goals quickly and safely, whether you’re putting cash aside for a holiday or preparing to.


Choose the right savings accounts

Not all savings accounts are made equal, and using the right options for your needs will help you get the best returns on your money.

Funds for the future such as a retirement pot or deposit on a house should be stored in fixed-rate savings accounts. These accounts do not allow withdrawals during a set period, but you are rewarded for keeping your money in the bank with a higher interest rate.

For savings you need to dip into fairly frequently such as your holiday fund or emergency allocation, choose an instant-access savings account. You can pay in and take out money as and when you need to, enjoying a slightly better interest rate than a standard current account. You can save £20,000 tax-free with an Individual Savings Account (ISA): choose a flexible ISA if you want to withdraw regularly.

Limited-access accounts are best-of-both-worlds options which offer good interest rates if you keep withdrawals to a minimum.


Look into long-term investments

Putting a portion of your savings into investments can be an effective strategy for staying ahead of inflation which will shrink the value of your savings in real terms over time. This is because investment assets usually offer better interest rates than bank accounts and are able to resist wider economic trends.

However, these rewards come at a risk. Unlike secure bank accounts which offer set returns, assets constantly fluctuate in value due to several factors from company activity to world events. Downturns – which are often unpredictable – can lead to losses.

Experiment with different types of long-term investment such as commodity trading, purchasing bonds and buying shares in companies on the stock market. Remember to include safety nets such as stop-loss orders to mitigate the danger of significant losses.


Minimise your short-term debt

Before you begin building your savings, take time to minimise your short-term debt. Also known as ‘bad debt’, this is money owed on short-term borrowing solutions such as credit cards and overdrafts. This type of debt usually has a high interest rate and can become unmanageable unless paid off quickly.

Remember that some debts do not have to be paid off straight away. Long-term borrowing with fixed interest rates like mortgages or personal loans can exist alongside savings endeavours.