If your savings accounts are shuffling along like a zombie at a lowly rate, here are five things you can do to bring them back from the dead -
with no incantations, spells or sacrifices necessary
1. Bonus expiring? Exorcise your account!
Most competitively-priced easy access accounts are propped up by a temporary bonus - and when it vanishes, usually after 12 months, the rate flatlines.
This time last year, for example, NatWest's e-savings account offered a healthy 2.85% AER (annual equivalent rate) but this incorporated a 12-month bonus of 1.81%. If you opened the account, its rate may have now withered to 1.04%. When your bonus expires you should move your money to something more competitive. The good news, as explained in greater detail here, is that you can now get the market leading BM Savings Online Reward easy access account's annual equivalent rate (AER) of 1.70% with an opening deposit of £1,000 - reduced from £50,000. You can also get the AA's Internet Extra easy access account's rate of 1.60% AER with a £1,000 opening deposit. 2. Reawaken long-lost accounts
Some savings accounts may not be dead at all - but old and forgotten. If you've ever changed your address or name, or you had an account as a child, you may still have cash in lost accounts.
Mylostaccount.org.uk uses the tracing systems of the British Bankers' Association (BBA), National Savings & Investments (NS&I) and the Building Societies Association (BSA), and can you help track down old bank, building society and NS&I accounts. Fill in a few forms using as much information as possible about your old names and addresses and you could reclaim any lost cash. The service can take up to three months, but has recovered £645million since launching in 2008. 3. Shield your savings from the vampiric taxman
Not yet taken advantage of your annual ISA allowance? Do it now! Until April 5, 2014, you can save up to £5,760 in a cash ISA and your returns will be shielded from tax. Consider it the garlic to a vampiric taxman.
Virgin Money has just launched three new, competitive fixed rate ISAs which are worth a look. Its one-year fixed rate cash ISA pays 1.85% AER, its three-year fixed rate cash ISA pays 2.20% AER, while its five-year fixed rate cash ISA pays 2.75% AER. You can read more about these accounts here. Meanwhile, Halifax's three-year ISA Saver Fixed pays a market leading 2.50%. You can open the account with £500 and transfers in are allowed.
4. Explore the 'other side'
Peer-to-peer (P2P) lending, where you lend directly to consumers and small businesses and bypass the banks, can earn you higher returns than a conventional savings account.
For example, you could get an average net return of 5.80% AER (after fees and bad debt) with Funding Circle, from a minimum investment of £20. Withdrawals are permitted at two days' notice and you can choose the business you want to invest in. It's by no means a dark art, but the big drawback of P2P is that it isn't sheltered by the Financial Services Compensation Service (FSCS), which protects the first £85,000 of your savings. It's also not regulated by the Financial Conduct Authority (FCA), although this will change in April next year. There'll be no change as far as the FSCS is concerned, however - P2P still won't be covered - so this means you could lose all or some of your initial investment. Some P2P lenders do have compensation arrangements of their own. You can read more about P2P lending here. 5. Better the devil you know
It sounds stranger than fiction, but some current accounts out-perform savings accounts, meaning you'd be better off keeping your cash there.
With the Santander 123 Current Account you can earn up to 3.00% AER on balances up to £20,000. You'll earn 1.00% AER on balances from £1,000; 2.00% AER on balances from £2,000 and 3.00% on balances of between £3,000 and £20,000. The new Current Account Direct, available from both Clydesdale and Yorkshire banks, pays 4.00% AER fixed until March 31, 2015, on balances up to £3,000. Nationwide's FlexDirect current account goes further, paying 5.00% AER on balances up to £2,500. But this rate is fixed for 12 months, after which it shrinks to 1.00% AER. You can get more on this here.
Note that conditions apply to these accounts, so you might have to pay-in a certain amount each month and pay a monthly account fee.
Rest in Peace
There you have it - follow our advice and in no time you'll be laughing maniacally and yelling "IT'S ALIVE!" as your savings rise from the grave.
Don't have nightmares... Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct
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