With interest rates at record lows and issues with the Help to Buy Isa coming to light, are there any savings accounts with a good rate of return?
In April 2017, the new Lifetime Isa will be introduced allowing savers to earn 25% interest on savings used to purchase a first property or when taken out at the age of 60 as a retirement fund. When the Lifetime Isa is made available, those aged between 18 and 39 will be able to save into them. For every £4 saved, the government will add £1 with a limit of £1,000 per year that can potentially be earned from saving (valid until the saver turns 50). Withdrawals are tax-free, however there is a penalty for withdrawing the money to spend on something other than a first property or before the age of 60. The penalty is 5% and the 25% government bonus (plus any interest earned) will not be given. Which? Money answer some of the commonly asked questions about Lifetime Isas here. You can also read our summary of Lifetime Isas on a previous blog post.
Other Savings Accounts
What if you aren’t saving for a first property or for retirement? With interest rates so low, savings accounts are not providing good rates of return at present. That isn’t to say that you can’t earn a decent rate of interest if you are prepared to lock your money away for a long time or adhere to certain stipulations. Moneywise have taken a look at some of the higher interest savings accounts available on the market today.