9 Jun 2026

Three Common Ways to Save and Invest

When you’ve got some money left over, and you’re without any debts to pay, then you’re in a good financial situation. It’s always nice to have some extra cash that you can use store away for a rainy day, but how to get the best out of your savings? There are plenty of options available, from savings accounts, shares and shares or bonds, but working out which one suits you isn’t an easy game. Check out this article to clarify your savings options.

Savings Accounts

The bog standard high interest savings account is available with a wide range of banks. Most accounts have a variable rate of interest, so if the Bank of England puts its base interest rate down in the coming year, which many analysts think is likely, then the AER on your savings is likely to be cut as well. They’re also not tax free, so make sure you check the ‘Gross’ interest rate, rather than just the AER. Also, take a look when interest is paid, be it monthly or annually, and if payments are adversely altered by withdrawals. According to the Motley Fool, the best AER on savings accounts are 6.41% by ICICI Bank (6.23% gross) and 6.3% by Principality (6.3% gross). If you take out Alliance and Leicester’s Premier Current Account you can also have a fixed regular saver of 12% for one year on balances up to £3,000. See their current accounts page for more.

ISA

An ISA is an Independent Savings Account which is tax free. Each year you can save up to £7,000 per year and not pay tax. There is a Mini ISA and a Maxi ISA available, and each type is divided into different investments. In a Mini ISA you can invest either £3000 in cash or £4000 in stocks and shares in one financial year. In a Maxi ISA you can include both elements with the same maximum amounts, with a total of £7,000 a year. Companies give you competitive rates on the cash element of the ISA, which like a savings account are normally susceptible to changes in the base rate. Normally banks will also offer you an assortment of options for the stocks element, such as investing in particular companies or a particular market.

Stocks and Shares or Investment Fund

Stocks and shares have more risk connected to them than the aforementioned investments, but you also stand to earn more in the long term from them. However, it’s not advisable to put 100% of your money into stocks and shares, especially if you want to access some of them in the next five years. You may find at times that your portfolio will have a lower value than what you paid for it, but 80% of the time diverse portfolios outperform cash over five years. You may want to invest yourself and pick stocks if you’re particularly savvy, but you can also get an investment manager or invest in a trust.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

Think carefully before securing other debts against your home, your home may be repossessed if you do not keep up repayments on your mortgage.

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