3 Ways To Make The Most Of Your Savings
Saving money can often feel like a daunting task, especially when you're just starting the process. For many, it’s not just about putting money aside but making it work better for you month to month. We have made a list of three of the most effective ways to maximise your savings.
1. High-Interest Savings Accounts
One of the simplest ways to make your savings work harder is by choosing the right savings account. Across Australia, many banks and financial institutions offer high-interest savings accounts that can significantly boost your interest earnings compared to a standard savings account. Our free GLOSS Vault app can help you with this by showing you the highest interest savings account where you’re located and how much extra money you could be making from your savings.
High-interest savings accounts offer better interest rates, meaning your money grows faster. Many of these accounts also come with no monthly fees, which helps you keep more of your savings intact.
2. Consider Investing in Term Deposits
If you have a sum of money that you don’t need immediate access to, a term deposit can be a great option. Term deposits offer a fixed interest rate for a set period, ranging from a few months to several years.
Term deposits usually offer higher interest rates compared to regular savings accounts. This is because you commit to leaving your money untouched for the term’s duration, banks reward you with better rates.
Things to Keep in Mind:
Your money is locked away for a fixed period of time. If you need to access it before the term ends, you might face penalties or reduced interest.
Different banks offer varying terms and rates. Look for a term deposit that aligns with your financial goals and time frame.
Understand the penalties for withdrawing early, as they can make an impact on your overall returns.
3. Invest in Low-Cost Index Funds
For those who are willing to take a bit more risk for potentially higher returns, investing in low-cost index funds can be a worthwhile option. Index funds are a type of investment that aims to replicate the performance of a particular market index, like the ASX 200.
Index funds provide a diversified investment with lower fees compared to actively managed funds. They are designed to match the market’s performance, rather than trying to beat it, which often results in more stable returns over time.
How To Get Started With Index Funds:
While index funds are generally considered a safer investment compared to individual stocks, they still come with risks. Make sure you understand these before investing.
Look for index funds with low management fees to maximise your returns. High fees can eat into your investment gains over time.
Consider setting up automatic contributions to your index fund. This approach, known as dollar-cost averaging, can help spread your investment over time and reduce the impact of market fluctuations.
A bonus tip for making the most of your savings is to have an emergency fund. We have created a blog piece on everything you need to know about an emergency fund and how useful they can be for financial stability and planning
Summary
As you’ve seen, you can maximise your savings in a number of different ways. By choosing the right savings account, considering term deposits, and exploring index funds, you can make your money work harder for you. By gaining knowledge on these ways and other options, you can be well on your way to securing yourself a positive financial future.
Here at the GLOSS Vault, we have made it our mission to help as many people like you across Australia and New Zealand feel in control of your money and ensure you’re getting the most out of it. To find out more about us and what we do click here. If you’d like to see our app in action for yourself head here!