Are low savings rates getting you down?

• Pay off expensive debts – interest rates on loans, credit cards or store cards are usually higher than the rates earned by your savings so it may be a good idea to pay off any debts. You could also think about paying more off your mortgage if your lender allows you to do this. Make sure you check whether there are any charges for paying off loans early.
  
  
• Shop around for savings accounts – competition between banks and building societies will mean some rates are better than others. Use our Compare savings account tables – they’re updated every day. You can input how much you want to save, and how often, and choose from taxed or tax free. You’ll get a range of accounts and providers to choose from.
  
  
• Consider how quickly you need your money – if you think you can leave some money untouched for a while or can manage with a notice account, you may get a higher interest rate – see Savings accounts.
  
  
• Go online – some internet accounts offer a higher interest rate than branch or phone accounts – see Compare savings accounts. But make sure you protect yourself and your computer from fraud – see Stay safe.
  
  
• Get your savings interest tax free – with a few exceptions, you pay income tax on the interest your savings earn. But putting money away in an ISA (Individual Savings Account) means the interest earned is tax free – it’s all yours. There are two types of ISAs (cash and investment), and limits as to how much you can pay in each tax year. And if you’re 50 or over you can now pay in even more – see ISAs.
  
  
• Get ahead of inflation – look for an after-tax interest rate that is more than the rate of inflation. Inflation is when the price of goods and services (eg food, clothes and household bills) increases. This also affects savings because if your savings earn less interest than inflation, the money you save now will buy you less next year. Check the rate of inflation on the Bank of England’s website – see Related links.
  
  
• Consider your attitude to risk – if you want to put some money away for a longer term (say five years or more) you’ll usually be looking at putting your money in some sort of share-based investment. Ask yourself how comfortable you would be with the risk your investment could go down as well as up. Risk is a very personal thing – what may be a small amount of risk to one person may be huge to another. For more information see New to investments.
  
  
• Find out how you’re protected – there are limits to how much money you’ll get back if a UK bank or building society failed; if you hold multiple accounts in banks that are part of a larger group different rules apply. If you save your money with a firm that is not based in the UK, their compensation limits may be different from ours – see Compensation.

• Too good to be true offers – any offer of significantly more than the average savings account rate needs to be looked at very carefully – there’s bound to be a catch. Whether it’s a tip from a friend, a phone call ‘out of the blue’, or offers to cash in your pension benefits – be wary. Find out how to protect yourself at Staying safe against scams and always check that the firm you’re dealing with is regulated by us – see Check our Register.
  
  
• Getting out of your comfort zone – it may be tempting to switch your savings to investment products for a higher return, but make sure you understand how long your money will be tied up for and how much, if any, of your original capital is guaranteed – see Structured products.