Interest rates may be predicted to rise in a matter of months but for now savings rates remain at a historic low.
In fact, Which? research shows that almost half (46%) of the savings accounts currently on the market are paying a measly rate of 0.5% AER or less.
It means that consumers have to be more savvy to get a decent return on their cash savings.
Here, Which? money experts share five clever tricks that could help get your savings in better shape.
Take advantage of the personal savings allowance now
From April 6 2016, basic-rate and higher-rate taxpayers will be given a tax-free personal savings allowance for the interest they earn on savings.
Basic-rate taxpayers will pay no tax on the first £1,000 of savings interest they earn in a tax year, while higher-rate taxpayers will pay no interest on the first £500 of savings interest earned per tax year.
Savers can take advantage of this tax-free allowance immediately if they open an account that pays interest annually, as the interest earned on their savings won’t be paid until after April 6 2016.
The Which? Money Compare savings tables let you search hundreds of savings accounts from providers large and small to find a great deal based on quality of service as well as cost and benefits, and there’s a filter tool that makes it simple to search for accounts that pay interest annually.
Which? Money Compare table: Fixed-rate savings accounts – find a great deal
Make use of multiple current accounts
Some current accounts are offering in-credit interest rates that can’t be matched by cash Isas or taxable savings accounts, although the maximum balance you can earn interest on tends to be much lower. However, you can open multiple current accounts and move money between them.
Our step-by-step guide to making the most of high-interest current accounts breaks down exactly what you need to do to maximise your returns from them.
Find out more: Making the most of high-interest current accounts – a step-by-step guide
Alternatives to savings accounts
Peer-to-peer lending websites offer customers an opportunity to secure better savings rates than they could get from traditional providers, although these higher rates come with added risk.
There is a risk that you will struggle to get your money back if the borrowers you’ve lent your money to fail to repay. What’s more, peer-to-peer lending websites aren’t covered by the Financial Services Compensation Scheme (FSCS), so your savings are not guaranteed to be protected if the website goes bust.
Regular savings accounts offer a secure method of boosting the interest rate you can get. These accounts offer up to 6% AER, although you’ll need to make a deposit every month and a maximum deposit amount will apply.
Which? Money Compare table: Regular savings accounts – our tables are updated daily
Stoozing is a complicated method of making money from an interest-free credit card.
It involves making all of your everyday purchases using a 0%-on-purchases credit card, allowing you to use your income to earn interest in a savings account or current account.
Provided you pay the minimum monthly payment on your credit card, and settle the full remaining balance before the 0% deal ends, this should cost you nothing in interest.
You should only get into stoozing if you are debt-free as it could end up costing you money if you don’t keep a close enough eye on your finances.
Which? Money Compare table: 0%-on-purchases credit cards – hundreds of cards compared
Get huge returns on a Help To Buy Isa
If you’re saving up for a deposit on your first home, it could be worth making use of the government’s new Help to Buy Isa scheme once it is introduced in December.
A Help To Buy Isa works like any other cash Isa, with the added bonus that for every £200 you save, the government will add an additional £50 towards the purchase of your home.
This 25% bonus only applies on savings of up to £12,000, and you can only deposit up to £200 a month on top of your £1,000 maximum initial deposit. Nevertheless, it remains a useful product for first-time buyers to boost their savings.
Find out more: Video guide: What is a Help to Buy Isa? – find out whether you’re eligible
- If you’ve not used your Isa allowance this year, see our guide to finding the best cash Isa
- Fancy taking your chances on premium bonds? Our guide explains how they work
- Looking to make some extra cash? We’ve listed 50 ways to make money
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.