Savings | How to Best Protect Your Savings

Ways To Protect Your Savings

Protect your savings has become a word that is on many savers lips as they watched how people in Cyprus recently lost most of their savings with the collapse of two banks in 2013. The European Union only protected the first 100,000 euros.  So how to protect your savings is now important to many savers around the world.

There are, however, ways in which you can help to protect your savings, so you don’t have to resort to hiding your money under a mattress just yet. Being aware of the various ways in which you can increase the safety of your savings means that you can enjoy greater peace of mind as well as greater protection.

Tips to protect your savingssavings

Saving money has become increasingly important in the current financial climate. However, if you are able to put money aside, you need to make sure that it is protected. Some of the ways in which you can do this include the following.

Open a savings account with a UK regulated provider:

Before you start putting your money into a savings account, make sure the provider you choose is UK-regulated, such as GE Capital Direct Savings. This means that you will be protected by the Financial Services Compensation Scheme (the FSCS), which is government-backed and provides protection of up to £85,000 if something should happen to the provider you have your savings account with. There are some EU banks that are not UK-regulated and therefore do not offer the same level of protection.

Spread your savings:

You may want to consider putting your savings into a number of different accounts in order to increase protection. Remember, the safety threshold for the compensation scheme is £85,000, so if you have more than this, it is worth putting it with a different UK-regulated bank so that it is also protected. Bear in mind that if you open two accounts with the same bank or provider you will still only be protected up to £85,000, so you should look at opening your second account with a completely different bank.

Start an ISA  (Individual Savings Account):

It is not just collapsing banks that you need to protect your savings from. You also need to try and protect them from the negative effects of inflation, which can be very difficult if you are paying tax on your interest. With this in mind, it is worth considering using your tax-free allowance by opening and putting some of your money into an ISA.

With these steps, you can make sure your savings are safer and more secure, reducing the worry that has developed over the security of savings deposits over recent years.

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