4 ways to earn more interest on your money
Reap a higher return by stashing your cash in a higher interest savings account, stocks and shares ISA or a credit union.
Summary: 4 ways to earn more interest
- Look for high-interest savings accounts.
- Switch to a current account with a higher interest rate.
- Consider a stocks and shares ISA.
- Join a credit union.
Look for a high-interest savings account
It's worth shopping around to see what interest rates are out there to help you make the most of your savings. Notice and fixed rate bonds often offer higher interest rates. A notice account is an account that requires you to give them notice of the date you want to withdraw the money. A fixed rate bond is a type of savings account where you lock your money away for a fixed period of time.
Making £50 in a year: Keeping £10,000 in an account that earns 0.50% annual percentage yield, which is the interest rate when factoring compounding, can earn you a little over £50 in one year.
» MORE: About savings accounts
Switch to a high-interest current account
Some current accounts have higher interest rates or other benefits, with some hoops. You might have to qualify by agreeing to have your salary or similar paid in regularly and by making close to a dozen debit card transactions a month. But if you can meet the requirements, your money could earn a stronger rate.
» COMPARE: High interest current accounts
Consider a stocks and shares ISA
With savings account interest rates at an all time low, you may want to consider a stocks and shares ISA that could offer you higher interest rates than a Cash ISA. However, as this is a stock market based investment, there will be fees involved, returns are not guaranteed and you may get back less than you invest.
» MORE: Stocks and shares ISAs explained
Join a credit union
Credit unions may offer perks on savings products. Interest rates may work in the same way as other providers, but you are more likely to receive an annual dividend, which is a share of the credit union’s profits.
» MORE: What is a credit union?
WARNING: We cannot tell you if any form of investing is right for you. Depending on your choice of investment your capital can be at risk and you may get back less than originally paid in.
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Spencer Tierney is an expert on certificates of deposit at NerdWallet. His work has been featured by USA Today and the Los Angeles Times. Read more