Do you ever wonder what you should do with your savings? For those of us who are lucky enough to have some cash set aside, why not implement a strategy where you can make even more money from your savings.
There are a vast amount of options to make extra cash and earning interest from your savings or investing your capital are just some of the ways you can do it. Usually, current savings accounts offer little to no interest on the money you save, especially now that the economy is suffering, these rates will only get worse, so it might be time to mix things up and think of a better alternative.
So, how exactly can you generate more money from your savings, what are your options and which ones are the most effective? We've put together this short guide on some of the ways you can increase your savings pot that could benefit you for years to come.
Put Your Savings in A Lifetime ISA
If you're slightly sceptical about moving your savings and don't consider yourself to be the most risk-averse then at least look into a more beneficial form of individual savings accounts. The Lifetime ISA launched in 2017 and is typically used by first-time buyers saving for their first home, or for retirement, with rewards of up to £30,000, for free, to put towards them.
If you're aged between 18 and 39 you can save up to £4,000 per year in the Lifetime ISA, where the state will then add an additional 25 per cent on top, which amounts to £1,000 free cash, and the best part is, it's totally tax-free. This is a reasonably straightforward way to earn a return on your savings, and you're not required to transfer a set amount of money. However, be mindful that you can only withdraw your money when looking to purchase your first home or when you turn 60, if you wish to take your savings out for any other reason you will incur a withdrawal fee.
Invest in Property
If you're thinking of buying a home, why not go a step further and invest in property as a way to generate more income. Investing your savings can make you a significant amount of money in the long run, and by opting for a relatively stable and secure investment such as property, you can look to make a high return on it.
There is a whole range of property investment opportunities for you to consider depending on your goal and current commitments. If you fancy buying a property, renovating it, and selling it on then a buy to sell investment is the one for you. Other favoured alternatives are buy to let properties, and providing you choose a lucrative location you could be set to receive high rental yields and great capital appreciation on your investment. If you're a first-time investor, it's best to seek specialist advice before parting with your hard-earned cash, and so it's worth reading some property investment guides by companies like RWinvest to determine the best locations and right property investment for you.
If you're interested in the investment route, you'll want to work on creating a well-rounded portfolio, and bonds should not be overlooked when it comes to making your money work for you. Typically, the interest rates on bonds are better than those paid by current savings accounts and don't pose too much of a risk when compared to more risky forms of investment such as stocks and shares, and when held for long periods of time can generate some great returns.
Bonds offer more predictable returns and historically outperform stocks during a recession. People usually invest in bonds to cover the loss on their stocks during a financial crash as interest rates decrease and bond prices rise.