Which? rounds up some of the best options available for savers in 2017.
Savers had very little to get excited about in 2016, as the Bank of England base rate cut delivered a hammer blow to an already-weakened savings market.
However, there are a few new products on the horizon that could allow you to boost returns on your cash savings in the new year.
- The Which? Money Compare savings and Isa tables let you search hundreds of savings accounts and Isas from providers large and small to find a great savings rate based on quality of service as well as cost and benefits
New National Savings & Investments (NS&I) bond
National Savings & Investments (NS&I) will launch a market-leading three-year bond in the spring.
The NS&I Investment Guaranteed Growth Bond is expected to pay a rate of 2.2%, but this may be adjusted to reflect market conditions when the product is launched.
Savers aged 16 and over can open one bond each, investing a minimum of £100 and a maximum of £3,000.
Which? Money Compare table: fixed-rate savings accounts – see how this product compares
The Lifetime Isa, designed to help under-40s buy their first home or save for retirement, will launch on 6 April 2017.
For every £4 saved in this product, the government will add £1 (up to £1,000 per tax year), up to the age of 50.
However, if you choose to withdraw your money before age 60 without using it to buy your first home, you’ll be hit with a 5% penalty and must return the bonus, plus any interest or growth on that bonus.
Find out more: Lifetime Isas – get to grips with this new savings product
Innovative Finance Isas
Innovative Finance Isas, which allow people to invest cash with peer-to-peer lending companies in a tax-free wrapper, were introduced in April 2016.
However, the larger P2P firms including Funding Circle, RateSetter and Zopa, have not yet received the official approval they need to launch them.
Peer-to-peer lending typically offers higher rates to savers than traditional lenders, but there is a risk of losing your money.
Nevertheless, if these larger P2P companies obtain permission from the Financial Conduct Authority to launch Ifisas this year, we could see a huge increase in savers using these products.
Find out more: Innovative Finance Isas explained – learn how these products work
Switching current accounts
High-interest current accounts have offered respite for savers seeking decent returns on lower balances for some time now.
However, Santander slashed returns on its popular interest-paying current account in November, while Bank of Scotland, TSB, Lloyds Bank and Halifax are all set to follow suit in early 2017.
Still, there are still some tempting deals remaining – and those who switch accounts using the Current Account Switch Service will have their new account set up within seven working days.
Find out more: Best current accounts for those who stay in credit – find a great deal with our tables
Investing cash savings
If you can afford to go without instant access to some of your savings, you might want to make 2017 the year you take some risk and switch to stocks and shares.
The most tax-efficient efficient method of doing so is through is a stocks and shares Isa. Although you can only make £15,240 worth of new Isa deposits in 2016-17, there’s nothing to stop transferring existing cash Isas into stocks and shares as well.
It’s also worth remembering that the Isa allowance increases to a huge £20,000 in April 2017, meaning your can shelter even more of your savings and investments from tax.
Check out our fund supermarket reviews to see how we rate 15 major stocks and shares Isa providers, based on their charges and several aspects of their customer service.
- See our all-inclusive money-saving guide: 50 ways to save money
- Sort your finances with our five steps to creating an effective household budget
- Your financial query answered by calling the Which? Money Helpline
Which? Limited is an Introducer Appointed Representative of Which? Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 527029). Which? Mortgage Advisers and Which? Money Compare are trading names of Which? Financial Services Limited.