How much interest ?

Daniel Cornish – Financial Planner at Wealthwide talks about the impact of higher interest rates for savers.

The Bank of England base rate has recently increased to 5.25%, a level not seen for 15 years. This has resulted in a wider spread in the rewards offered for cash accounts from banks and building societies. Although there are higher rates available from a range of providers many people’s standard current and savings accounts are seeing their interest rates remain stubbornly low. Business loan and mortgage rates have increased dramatically in the past year, so the financial landscape has certainly changed significantly.

As a career in dentistry can offer above average earnings, many associates and practice owners often have significant sums of money in personal or company cash/savings accounts. This could be for many reasons, saving towards a new home, a buy to let property, purchasing your first practice or funds that have accumulated from profits.

Many are aware they are likely to be able to get a much better interest rate than they are currently receiving. However, it is time consuming to hunt out the best interest rate among the high-street lenders let alone the myriad smaller banks and building societies who offer very competitive rates that we rarely hear of. Especially when there are many other calls on your time as a dentist.

Cash platforms

This is where cash platforms come in. Cash platforms research the best rates for their customers whether they need instant access or fixed term accounts - from six months to five years - and present them to customers based on their preferences.

This means users of cash platforms save time in finding the very best savings rates in the market without having to resort to multiple Google searches. Platforms are usually pro-active and will update the best available rates as they change, saving the need for future research so you can get back to doing what you want to do. This makes it easier for savers to earn higher interest rates, putting people in a better position than if they left their money in their high-street savings account.

Cash platforms make it easier to keep track of users’ cash savings because they use a single login which allows the user to access all the savings accounts they have even if their money is spread over half a dozen accounts. This can also save the administration of having to remember half a dozen usernames and passwords.

Cash platforms can provide greater security for your capital as you can elect to spread your savings over multiple accounts up to the £85,000 threshold for FSCS protection. This gives savers peace of mind that their money is protected regardless of what happens to the economy and account providers.

This can be the case for money you and your business hold as the majority of cash platforms provide accounts for personal and business use.

So, if you have surplus cash in your accounts which you are not sure what to do with but want the best possible return from your money in the short-term while you decide what to do; a cash platform could well be for you. You can get the best available interest rates and take any time pressure off such a decision as your money will be working for you in the short-term and avoids exposing it to any additional risk.

If you need help in figuring out how best to allocate your money – such as how much you should keep in cash, what investments you can make to avoid tax, and what you need in the short, medium and long-term, I’d highly recommend organising a financial plan. This process can help you define your objectives, make the most of your finances, achieve your life goals and live the life you want to lead.

For more details on either cash platforms or financial plans – please arrange a call with one of our specialist financial planners.