Some efficient ways to save for tomorrow in 2011

We are all aware of how important it is to save and the benefits of saving.  But we don’t really end up putting away our money in savings accounts as the interest rates that are offered are not really inspiring to say the least.  Hence saving is really a bit of a challenge.  We prefer storing that cash at home instead of saving it in the banks.  According to the new research by the FSCS or the Financial Services Compensation Scheme it has been found that at least over $7 billion is just lying about in individual homes.  On an average people have over $280 (apart from the money in their wallets) lying at home.  At least 4% stated that they had over $1,000 and 1% stated that they have over $10,000 lying at home.

The reason for all this cash lying at home apparently is due to the low interest rates on savings which banks and building societies have to offer.  This fact is not really surprising, but if you were to look around there are still a good many possibilities to earn a good rate of interest on the savings that you have and this is most certainly better than getting nothing.

The Post Office Online Saver is the easy access savings account which pays the best interest rates at 2.90%.  To start off with you can open an account with $1 and access the funds at any time without paying a penalty.  The interest rate however includes the bonus for one year (1.25%).  By the end of the first year, you can always evaluate and see if the account is competitive or you could move your funds to another account.

The account that does not come with a bonus rate is the ING Direct Savings Account which pays 2.70% interest.  This interest will remain through the first year.  So the interest rate will not drop suddenly and that much is guaranteed.

After the end of the one year period the interest rate falls sharply to 0.50% which might indicate that you look for another account to move the funds.

You could alternatively lock up the funds for a fixed period of time and avail the interest rate.  The interest rates will remain constant through the term of the bond and this could be benefitting.  But the flipside is that your funds will not be easily accessible for that period of time.