Nine Financial Products That You Simply Must Know About
Too many of us are wasting too much money on our financial products. According to uSwitch, the average household could save up to £1,500 a year if they changed things such as energy providers, insurers and banking. All too we give into apathy or customer loyalty, even when the best products are actually quite easy to obtain – especially when you do it online. If you’re looking to save money in the coming year, then here’s a quick list of some of the best banking products available.
Best Credit Cards
If you’re paying interest on your credit card, then it’s probably time that you switched provider. That is - as long as you have a good enough credit rating to switch of course. The best credit card deals are split between two types of 0% promotional deals. There is 0% on balance transfers and then 0% on purchases, few cards offers both bonuses at once. Natwest, however, offers
credit cards with 0% on balance transfers (2.9% fee) for 13 months and 0% on purchases for 6 months upon the account opening, which is an excellent combi card. It’s also one of the longest 0% transfer deals, although the top card for doing just this is Virgin Money (MBNA), which guarantees 0% until for 15 months, and you can transfer to your current account (you can’t do this with Natwest). The best for 0% on purchases are HSBC and Halifax, which currently both offer one year periods.
Best Current Accounts
There are currently two bank accounts that are well worth a mention if you want to be rewarded for switching. The first of these is by
First Direct, which gives you £100 after three months if you switch to them. Strangely, they’ll also give you a £100 if you leave them within 12 months of opening their account. This can be more lucrative than even the top interest rates offered by banks.
If you head to the current accounts pages of Alliance and Leicester’s website, then you’ll come across the best all round account that’s currently on the market. This promises a huge 8.5% interest rate on balances up to £2,500 for the first year, and it has the option of a sizeable 0% overdraft for 12 months (the size of the overdraft is at the discretion of the bank, but it cannot exceed £2,500). You can also earn a £25 bonus for both you and a friend if you successfully recommend them – and there’s no limit on how many friends you can refer!
Best Savings Accounts
Savings accounts are amongst the most confusing personal finance products. You’ll see best buy tables on comparison websites quoting a best AER, but these aren't always wholly truthful. On
savings accounts you’ll find that there can be penalties for withdrawal, and these won’t be reflected in best buy tables. You’ll also get taxed, sometimes up to 20%, on anything you put in. Currently, the best on the AER on the market is offered by
Kaupthing Edge at 6.5% as long as you have £1000 in the account. If you’re saving a small amount of under £7000, then it’s well worth considering an ISA. These have been criticised for being too complicated, but you can read about them in simple terms from this
Introduction to ISAs article. In a nutshell they’re a tax free savings account where you can invest £3000 in cash and £4000 in stocks and shares. These rules are also set to change in the new tax year – read about it
here. If you want to take out an
ISA, then Alliance and Leicester offer a rate of 5.65% AER (variable) including a 0.4% bonus until 31/01/09. If you also get a current account with them, then they can offer up to 10% AER for investments of over £5000!
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