Do you stash cash at home rather than in the bank? If so, not only are you missing out on making some return on your savings, you’re also losing the protection your money would have if you kept it in the bank.
New research from the Financial Services Compensation scheme (FSCS) has found that a staggering £7 billion is lying around people’s homes.
This means that on average we are keeping £280 at home, although 4% of those surveyed admitted to having more than £1,000, and 1% had more than £10,000.
Keeping this sort of money at home just doesn’t make sense. For a start, if you put your money in a bank or building society which is covered by the Financial Services Authority (FSA) you get FSCS compensation up to the new limit of £85,000 if the bank or building society were to fail. If it’s under the mattress or in a piggy bank however, you may find that it’s not even covered by your house insurance if you were burgled.
It’s in your interest to save
And of course, any money lying around at home isn’t earning any interest. While it’s true that interest rates on savings accounts can be pretty paltry at the moment (and low interest rates were the reason why a third of people in the survey didn’t bother keeping their money in a bank) it’s still possible to get a decent return if you know where to look.
Back in October when we launched the Great British Savings Scandal, we found that British savers were losing out to the tune of £12 billion by not having their savings in Best Rate accounts. That equates to £322 for every saver. If you’re keeping money at home rather than in a bank or building society, then you’re losing out as well.
Put your money in a Best Rate savings account on the other hand, and you could be earning as much as 2.8 or 2.9% in interest. And if you’re a tax-payer, a Best Rate cash Isa will pay similar rates but you get to keep all the interest as you don’t even have to pay tax on it.
Not only will your money be working for you, but you can rest easy that it’s well-protected. Can you say that when your money’s under the mattress?