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Investments

Many people today find themselves in a favourable financial position, and if you are fortunate enough to be in such a situation you will want your money to work hard for you.

Investing your money in a standard savings account is a common approach, and is a safe method of investment. There is a large range of savings accounts on offer, the main types being easy access, notice accounts, term accounts or bonds, regular saving accounts and tax free accounts – each of these offer the saver different services the main points of each are discussed in the following sections.

Easy access savings accounts

This type of savings account is designed to allow the customer instant access to their savings, and you will be free to deposit and withdraw funds at any time you wish without penalty. This flexibility is important if you have money that you wish to be earning you a good rate of interest, but do not know if and when you will need access to the funds. Interest rates for easy access accounts are better than those offered by current accounts, but because of the flexibility offered the rates will not be as good as for notice accounts.

Notice savings accounts

A notice account is the other end of the scale to easy access accounts, offering a higher rate of interest but restricting the access that you have to the money invested. Banks can require notice periods of between 7 to 120 days’ notice to be given in advance of a withdrawal being made. You will be free to withdraw your money as you need, but if you do so without giving the proper notice you will be subject to a penalty, often implemented as a loss of interest on the account for the notice period term. If you have money to invest and you know that you will not require access to it at short notice, then a notice savings account will ensure you get a high rate of interest.

Bond savings accounts

These accounts will generally provide you with the highest levels of interest, and they require you to commit your money to a fixed term. Once you have invested your money into a bond account you will have no access to it until the set period has expired, and you will usually be prevented from adding to the amount after the initial investment. Unlike the previously discussed accounts, interest will be paid at a fixed rate and will not be dependant on the Bank of England base rate.

Regular savings accounts

With this type of account you are required to invest a set amount each month (or an amount between upper and lower set amounts) and you will generally not be allowed to pay in lump sums. Access to the account is often instant, not requiring any notice period.

Tax free savings accounts

These accounts come in the form of Maxi ISAs, Mini Cash ISAs and TESSA only ISAs. There are a number of restrictions placed on these account regarding the limits you are allowed to invest in each financial year, these can be quite complex to understand and you should consult with the financial company you wish to deal with to find out the specific details.

A savings account is a safe investment for your money, there is no risk of you losing the money that you put in, however there are other ways in which you could put your money to use that could earn you more providing you are willing to take more risk.

Property Investments

Investing in property is a popular way to make your money work for you, buying a house can earn you money in two key ways: rental income and capital gains. Renting can bring in a good amount of money if the property is in a desirable area, and if the value of the house increases the gain can be obtained through sale. This approach will tie your money up in terms of buying the property, a large amount will be required for a deposit on a buy to let mortgage and there will be monthly repayments to meet, which in the best case will be covered by the rent – however if the property doesn’t have a tenant then you will need to have the funds to cover the repayment.

Stock Market

The stock market can be a good option for many people, and good portfolio of shares can lead to significant return on investment. This approach puts your money at greater risk than the other options discussed so far, as it is possible to loose your entire investment if the companies you have bought into perform badly. If you are going to take this route you should seek advice from several stock brokers to get an idea of the market and if this type investment is suitable for your situation.

There is a wide variety of ways that you could make money through investing the funds that you currently have, which specific approach you choose will depend on your situation and your attitude towards risk, take a look at a resources page to find a listing of companies and organisations who will be able to help you to invest wisely. If you cannot find what you’re looking for here in the way of a suitable loan then you are bound to find what you are looking for at Loans UK- where all Mortgage and Loan products are covered.