How to save for a living room makeoverHow to save for a living room makeover
Summer is always a popular time to re-evaluate the décor and set up of your communal area. Having hosted and attended numerous dinner parties and barbeques during the warmer months, you have had the chance to sit, admire and compare the living rooms of friends and acquaintances. Perhaps during these numerous encounters over tea and tipples a brilliant décor idea has suddenly sprung to mind. Whether you are musing over a minimalist, Asian-inspired or modernist theme, one thing all makeovers require is a bit of spare cash.
If you already have some savings, your living room makeover can serve as an excellent opportunity to reassess whether you are getting the best savings rates on the market; after all, the best deals can be had from switching to a new bank or building society. For those venturing out for the first time, don't be too daunted. After a bit of homework you will be well placed to know where best to park your savings.
On the whole, the most competitive interest rates are offered on Individual Savings Accounts and savings bonds. Savings bonds are relatively simple to comprehend; you commit to a fixed term in which you do not withdraw your savings but are offered great interest rates.
ISAs, on the other hand, are an especially attractive financial product because of their tax-free status. There are two different accounts, cash and investment ISAs - with the former you can only pay in a maximum of £5,340 in any given tax year, whereas with the latter you are permitted to invest £10,680. Beyond this, there are other notable differences. Cash accounts operate as any current account does; you can access your savings instantly with a bank card at an ATM and you cannot incur any financial loses. Although if you want more attractive interest rates you can opt for a fixed-term cash account and commit to a term in which you do not access your savings.
Investment accounts can be riskier but potentially a more lucrative alternative. You can decide on both the investment decisions and who you would like to manage your funds, whether that is yourself or a collective fund manager. You must remember, however, that you can also lose money with investment accounts, so be sure on how much risk you are willing to assume - do not just look at the returns on offer.
With the aid of a savings account or bond, you will have enough cash in no time to get your living room up to scratch and ready for those admiring guests come next summer.