finance article No.8604
Saving Clever
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The global credit crunch currently sweeping the world has had many implications for businesses and consumers everywhere. Many banks have filed for bankruptcy as a result of uncontrollable lending and those who have survived have changed strategy dramatically meaning several huge implications for the common saver. Many of the most popular banks and financial institutions have cut back the amount of loans products on offer leaving many consumers with less access to funds, which in turn has resulted in a huge reduction in consumer spending globally leaving many retail organisations in threat. In an attempt to increase spending amongst consumers Governments have slashed interest rates in the belief that this will free up more income for consumers and therefore encourage spending. The down side of this action is that lower interest rates are bad news for regular savers who are now looking at lower returns and discussing whether the institute they currently save with is a safe home for their money. There are two steps that can give regular savers peace of mind and guaranteed returns. The first is to select an institute that is safe, stable and unlikely to fold in the current economic climate. When analysing suitable banks/ institutes it is essential to assess their reputation, for example have they been a consistent and successful organisation for a long time? Also what kind of Government backing do they have? Many financial providers have 100% government backing meaning money can be placed here safe in the knowledge it is not going to be lost. Once selecting a suitable organisation it is then essential to select a consistent savings product. In the current economic climate I would advise staying away from products that are linked to share performances or government rates. A much more reliable option is fixed ratesavings accounts. As long as you do not require a lot of access to your submitted funds this type of product will give you a guaranteed return at a consistent rate of interest and if a tax efficient saving account is needed a saver should look at an isa . Following these simple steps will give any regular saver a greater peace of mind and stability in a time of uncertainty.
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