If you have a savings account then you may be pretty disappointed in the amount of interest that you can get on it. Rates tend to be pretty low on accounts, especially if they are instant access accounts (meaning you can draw money out whenever you wish). It might seem like all rates are pretty dire though and you may feel it is not worth bothering to look and then go through the hassle of switching things over. However, there are some reasons why this could be a good idea.
Higher Interest can add up
It is worth considering how much a higher interest rate can add up. Even if the interest is only a little bit higher, if you keep adding to the account, having the interest paid into the account or even just not withdrawing any money from it, it can add up. The longer you leave the money in the account, the more impact it will have if you have a higher interest rate. It seems silly not to try for a higher rate and get more money in a way, you will have to do very little in order to get it and it is essentially free money.
Some accounts can pay more interest
There are different types of savings accounts and some will pay out more money than others. For example, if you are prepared to give notice before making withdrawals then this will help you to find accounts with higher interest rates. Obviously, you may want to be able to get hold of your money quickly, but if there is some that you are happy to tie up for a while, then these types of accounts can be handy.
There are also fixed rate bond accounts, where you have to leave your money in the account for a year or several years. These will offer a fixed rate of interest for this time period and so there is always a risk that interest rates will go up and you could have had a better deal elsewhere. However, the rates tend to be more favourable that what is available on instant access accounts, so even if rates on these go up, chances are that you will still get more.
With both of these types of accounts, you need to be aware that you will not have instant access to the money. You will need to think about whether you will be able to tie it up, as if you do withdraw it early (if you are even allowed to) you will lose out on the interest that you were due to be paid.
It is Easy
It may seem like hard work, but it is very simple. There are plenty of websites where you can research and compare the rates of savings accounts so that it is easy to identify which one is paying the most. Transferring money across is also simple. You will need to send ID if you are applying to a bank or building society that you have never used before, but you may be able to just take some into a branch. Once you have done this then the process of opening the account is straightforward. They will want to make it easy for you as they will be keen for you to save with them. It is therefore likely that you will only have to give them a bare minimum amount of information and transfer the money over and the account will be open. Just a little bit of time to make more money, does seem well worth the effort.