Escape low-interest bank accounts before you lose more money

Lately, I’ve been doing some digging into our bank accounts, and found one that was paying a paltry .75% interest and another paying 1.75% after a fixed-rate deal ended….so I wanted to share why now is the time to move your money to higher-paying interest accounts, and some ideas on what to do.

1.         Inventory your accounts

Make sure you know about every open account you have. Ever wondered if you have some forgotten cash stashed away in a dormant account? It’s worth checking! You can contact your old banks or use online services that help track down these hidden treasures. You’d be surprised how quickly those small amounts add up. You can use ‘My Lost Account‘ to start a free search. It’s a joint venture from UK Finance, the Building Societies Association, and National Savings & Investments (NS&I). This nifty service helps track down those hidden treasures. Once you have a full inventory, then work out how much interest is being paid.

2.         Keep your eyes peeled for the latest deals

Next up is to see what’s available…banks are always changing their offers, and there’s a neat trick to stay on top of the game. Do a quick Google search for “Where can I get 7% interest on my savings UK” and see what results pop up. Today, I saw first direct offering 7% for a regular saver account, Lloyds Bank offering 6.25% on the Club Lloyds Monthly Saver, while NatWest is offering 6.17% for its Digital Regular Saver.

3.         Diversify

You know how we talk about not putting all our eggs in one basket? Well, the same goes for our money. I’ve been spreading it out a bit—some for emergencies, some for short-term goals, and even a little for the long term. It’s like having a financial buffet, and I get to pick what’s right for each situation.

You’ve got easy access accounts and fixed-rate accounts. Easy access is like having your money at arm’s reach; you can get to it whenever you need. But here’s the thing—it often comes with a trade-off. The interest rates might not be as juicy, and there might be restrictions on the amount you can invest.

On the flip side, there are fixed-rate accounts. These are like making a commitment. You agree to keep your money locked in for a specific period, say a year or more, and in return, you usually get a higher interest rate. It’s like planting a money tree and letting it grow.

Fixed-rate accounts typically pay more because you’re telling the bank, “I’m in this for the long haul.” It gives them the confidence to offer you a better deal. So, if you have some savings that you won’t need to touch for a while, consider stashing them in a fixed-rate account to watch your money grow faster.

Easy access accounts, while convenient, might limit how much you can invest. Some banks might set a cap on the amount you can put in or have tiered interest rates that drop as your balance increases. It’s like having your money in a hotel; it’s comfy, but it comes with some rules.

4.         Switch accounts

Now that you’ve looked into your accounts and found some better options, let’s talk about making the switch. If you don’t want to go far, just stick with your own bank and check what accounts they have offering better interest rates. Luckily, it’s become pretty easy with most banks’ apps. If you’re already using a bank, just log in, find your account settings, and check out what’s available. It’s like switching channels on your TV—simple and quick. But if you’re eyeing a new bank, make sure you’ve got the right ID and proof of address handy before heading over. Most banks let you do it all online, but others might need you to swing by with ID proof anyway. If you prefer to go in in person, be ready for a bit of a wait or set up an appointment ahead of time.

This move can really pay off, giving you better interest rates and making your money work harder for you. So, take advantage of the tech we have today, and switch things up to get more out of your cash.