Main Points
- Cash deposits are the most uninteresting part of personal finance, but at the same time can more than offset the benefits of ISA
and pension investments.
- Internet and telephone based deposit takers should provide the highest rate.
- For those of you with mortgages, the best possible form of deposit should be the repayment of your mortgage.
- The best rate does not mean the highest rate.
Introduction
The management of cash is one of the least exciting aspects of personal finance. However, the potential loss in interest payments can
be considerable if the money is in the wrong place at the wrong time. Most bank accounts pay a nominal rate of interest, so ideally
the maximum sum should be held in specialist deposit accounts at all times.
The most competitive accounts are those run solely through the Internet or over the telephone. The low overheads are passed onto you
with consistently attractive rates of interest. A fine idea in theory, but in practice not always true.
Some of the best rates of interest can be secured from the reduction of your mortgage. Therefore, the mortgage should be part of the
overall management of your cash. Indeed very rarely will the rates of interest secured from a cash deposit exceed the cost of a
mortgage.
Selection Criteria
Please note that we have chosen some accounts that have an initial bonus attaching to the rate, which is most attractive for a
relatively short term investment. If you are considering holding money in cash over the longer term then you should consider a
bonus-free rate.
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