OVERPAY YOUR MORTGAGE

MATT ROPER HAS ALTERNATIVE WAYS FOR YOU TO INVEST YOUR MONEY

ABULGING savings account was once the mark of a prudent worker. But now, with interest rates at their lowest level on record, they seem like the last place you’d want to keep your cash.

The average easy access rate has dropped to a historic low of 0.3%, down 0.29% from January – meaning most are seeing precious few returns from the money they’ve saved. There’s even talk that this is the end of the savings account.

Helen Saxon, banking editor at MoneySavingExpert.com, says people should be looking around for better ways to invest their money.

She says: “A savings account for a rainy day is a good thing to have – cash you can get your hands on when it’s needed, covering about three to six months’ outgoings.

“But, if you’ve got an emergency fund already and are wondering whether adding to a bog-standard savings account is worth it, there may be other options to make your savings work harder for you.”

Here we look at other ways you can make your savings pay.

OVERPAYING your mortgage could potentially bring gains worth tens of thousands. You don’t pay interest on the amount you overpay, so what you save on interest will almost certainly beat the returns possible by putting it into savings.

Overpaying means you make the same gain as saving at your mortgage rate, so with a 3% mortgage, you’d need savings paying at least this to beat leaving your money in a savings account.

But check first if there are any penalties for overpayment.

TV financial expert Jasmine Birtles of MoneyMagpie.com says: “Paying off your debts and your mortgage is the most secure thing to do with your money, because there is zero risk.” investors are no longer allowed to put more than 10% of their investable assets into P2P.