Savings rates are rotten at the moment: you’ll be lucky to get 1% on your hard-earned cash in most savings accounts. So why bother? The answer is that you can get four times this rate – and not only if you have huge amounts of cash. Regular savings accounts are the answer. Next week, Ford Money is due to launch a regular savings account with a rate of 4% - and you only need to save between £25 and £250 a month. You can get more than that – 5% - from various banks including HSBC, Santander and First Direct – but you’ll usually need to be an existing customer of the bank with other account(s).
I’m not going to bother with the Ford Money account, even though it looks like a good deal. That’s because I – or rather, my son – already has a regular savings deal at the same rate of 4%. Ever since he was born 11 years ago, I’ve put £100 – basically, his Child Benefit plus a few pounds on top – into the Halifax Kids’ Regular Savings Account. I can’t remember what the rate was when we started – I know it has been 6% at some point – but the current rate of 4%, fixed for a year, is good and that’s on a minimum £10 a month as well as the maximum £100. At yearly anniversaries, the money moves into a linked Young Saver account which, currently, is paying a variable rate of 2% on balances up to £20,000.
I don’t know how much is sitting in the boy’s account but it’s going to be in five figures, even though I admit I occasionally dip into it when I am a bit short. If I had more spare cash, then rather than put it in the boy’s savings account, I would probably put it into his Jisa which I haven’t put any money in for years. This is invested in funds, rather than cash. And it hasn’t suffered from my neglect: the last time I looked he’d done rather well from the conservative funds I’d chosen to put his Jisa into. And I’m not sure whether now is the greatest time to invest, given that the stockmarket is storming ahead. So I’ll probably just carry on bunging in the £100 a month into the Halifax account – at least I know that it’s the best deal I can find.