plonkee money an english-er's thoughts on personal finance

September 19, 2007

spiders and savings

Filed under: savings — plonkee @ 11:48 am

I would like to tell you about my foolproof method for getting rid of spiders. Pick them up with a couple of magazines¬† and then throw them outside. Do not however do this in a manner that causes the spider to somehow get caught up in your hair. Its a very unpleasant experience to run your fingers through your hair, hit something that you think is a leaf and then realise that it has legs. This happened to me a few days ago and I’m still shuddering now. Clearly this spider story has nothing to do with personal finance, I’m only mentioning it because I have a compulsive need to share it with as many people as possible.

Although I posted on Saturday that I don’t think that anyone should rush out in a panic and withdraw their money from Northern Rock, I also don’t think that you should be holding vast sums of money in the bank. Not because they’ve suffered in the recent credit crunch, but because they aren’t the best buy for savings accounts. Its generally worth shopping round for the highest interest rate savings account from any regulated bank or building society. Generally, there’s very little to choose between savings accounts other than the interest rate as the best rates at the moment are from ISAs and instant access account, so there’s no good reason to tie your money up for longer.

I check to see which is the best account periodically, usually every year and then switch my money as relevant. I don’t think that you get anything for being loyal to a particular bank nor for a building society unless you are hoping to benefit from windfall shares. In any case, even if you do want to be loyal, you’ll get more out of your money if you stick most of it into the highest paying account and review it regularly. There’s really nothing more to savings accounts, they are a dull, unexciting but necessary component of any good financial plan.

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