Start saving for Christmas...2007
21 November 2006
Rachel Thrussell, Head of Savings at moneyfacts.co.uk comments: “On average we each spend £600 at Christmas time on presents and festivities, so it’s a good idea to start saving as early as possible. Using a regular savings account might be an ideal solution, offering decent rates of return with the security and protection offered by your bank, which cannot always be found within other Christmas saving schemes, as we sadly saw with the collapse of Farepak.
“Although it may seem a little early to start thinking about Christmas 2007, most regular savings accounts are fixed for a 12 month period, so by starting now you can ensure your savings will mature just in time to start your 2007 shopping spree.
“In general, regular saving accounts allow you to invest somewhere between £10 and £5,000 per month, with rates of at least 6% easily found, ranging as high as 8.25% or up to 10% if you choose to hold your current account with the same provider. Most require between 11 and 12 monthly payments and around two thirds permit limited withdrawals.
“If you were to save £600 in a regular saver account, at the end of the year you could have earned an extra £25 in interest – enough to buy that extra Christmas present, treat, or pay towards a new party outfit.
“But if you are looking for something with a bit more of a festive flavour, then the Dudley Festive Saver could be an option. While the account only pays 0.25%, it does offer a bonus of 4% if eleven out of twelve payments and no more than three withdrawals have been made. So with the average interest rate on a notice account standing at 3%, it still offers a decent return, while also offering the opportunity to win a festive hamper in an annual prize draw.
“If you are able to commit a regular amount to a savings account, no matter how small or large, you may be surprised how quickly your savings grow. Regular saving accounts can be an ideal home for your longer term savings, whether it be planning for next Christmas, your next holiday, or just for a rainy day. But one word of caution; make sure you know the full terms and conditions before committing, as these accounts will commonly have investment, term, withdrawal and payment restrictions and may require you to transfer your current account.”
