Savers have been encouraged to set up a helpful feature on their savings account to help build up their savings faster.
Tesco Bank savings and payments director, Chris Henderson, shared some tips to keep on track towards your savings goals.
One idea he shared is to set up a monthly transfer to your savings account. He explained: “This helps earmark money for savings so you don’t spend it elsewhere.
“Whenever you spend less than you think, consider putting the extra money straight into your savings pot, as that’ll help you reach your target faster.”
The Bank of England recently dropped the base rate again from 4.75% to 4.5%, so savers may be keen to snap up any high rates before they fall again.
For those looking to switch, Mr Henderson said: “Whether you’re after an easy access savings account, an ISA, or a fixed rate saver, there are plenty of options available to ensure you can squeeze even more out of your budget.
“No matter what type of savings account is right for you, it’s important to spend time shopping around to ensure you get a competitive rate.”
He said a fixed rate account may be a good choice if you have a long-term savings goal you are working towards, as long as you’re happy for the funds to be locked away without easy access for the term of the account.
The expert said: “It’s important to remember that a fixed rate means you won’t see any rises or falls in your returns if the Bank of England makes changes to its base rate. However, a fixed rate can give you peace of mind from a consistent return on your savings.”
Another piece of advice from the savings boss is to decide how much you want to save as this can also motivate you to reach your goal faster.
Then you can work out how many months you’ll need to save up for to achieve your target. Mr Henderson said: “This is important if you need to save for something by a certain time, like a wedding or a house deposit. Once you’ve got into a routine, you’ll feel more in control of your savings.”
NS&I recently announced it will be reducing the prize fund rate for Premium Bonds again, which will fall from 4% to 3.8% from the April draw.
Some experts say more rates cuts could be on the way for Premium Bonds. Darren Mercieca, finance expert at Kiwi Bets, said: “There’s certainly a possibility that the prize fund rate could be adjusted again, especially if economic conditions shift. In the past, the rate has fluctuated based on market conditions, so it wouldn’t be surprising if further cuts happen, but no one can say for sure.”
He said he thinks the rate could drop to as low as 3.5%. Mr Mercieca encouraged people with Premium Bonds to look at other savings options.
He explained: “A high-interest savings account or a fixed-rate bond, which locks in a guaranteed return, may be better options for anyone thinking about cashing in their Premium Bonds.
“Peer-to-peer lending platforms and stocks and shares ISAs may provide greater profits if they’re seeking something a little more active, but the risk is higher.”
