Person putting a coin into a piggy bank

Start saving in 2024

New year, time for great new money habits. It’s a good time to start saving (or putting more money away)

The start of the new year is a great time to start saving, or increase the amount we’re putting away.

Not only is it a good opportunity to start good money habits, interest rates are higher than they’ve been for a while.

Rates were down below 1% for ages, but now there are savings accounts offering 5% or more.

It’s worth shopping around and having a look on Money Saving Expert, where they update the rates regularly.

As well as the interest rate, we should look at how quickly we can take our money out if we need it. Easy access generally means we can take our savings out straight away. But on the flip side we’ll probably earn more interest from ‘notice’ accounts.

For some ‘fixed term’ accounts, we’ll need to keep our money in the bank for the entire fix period.

In return, we’ll get a fixed amount of interest and won’t be at the mercy of interest rates, which can go down as well as up.

Any savings account we choose should be ‘FSCS protected’. That means that if the bank goes bust the government will cover our savings (up to a whopping £85,000).

Make it a regular thing

If we can afford it, setting up a regular payment into a savings account is a great habit.

Then we can just forget all about it. We’ll be pleasantly surprised when we see how much has built up.

Another option for saving is Premium Bonds. Instead of interest, they pay out monthly prizes based on a random draw.

Prizes start at £25 and go up to £1m. But the chances of winning are really slim – one in 60 billion for the top prize. Even the £25 prize is only one in 21,000.

But as it’s a government savings scheme, our money should at least be very safe.

And if we need a Sharia savings account, there are some on the market that give ‘expected profit’ rather than interest. Again, we should look for one that’s FSCS protected.

Image: Joslyn Pickens / Pexels

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