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If you want to lock away your savings, how can you do it?

by , 26 January 2016

It's great to build up savings over the years. Not only will savings help you achieve your long-term financial goals, but they also give you a cushion in the event you need access to cash.

So what are your choices when it comes to putting your money away for a bit?

Let's take a look at two options…

Putting your savings into a term deposit account

You can lock your savings into a term deposit account. You can decide between anything from 60 day to five years.

The longer you lock your money away for, the better the interest rate. This interest rate is fixed for the term you decide to put your savings away for.

Some banks are currently offering decent rates of interest for anything from a year upwards. Make sure you shop around for the best offer to suit you. Don’t just automatically open up a term deposit account with your current bank.

Putting your savings into government retail bonds

Just like a term deposit account, government retail bonds require you to lock your money away. You can decide from two, three and five years for a fixed-interest rate.

At the moment, the interest rates on government retail bonds appear slightly higher than the best the big banks have to offer.

Picking the best savings solution for you

The main thing to consider before committing to either of these options is that you definitely don’t need the money first.

You will pay a penalty for early withdrawal with a term deposit account and government retail bonds. With government retail bonds, you can’t remove your cash in the first year unless you prove it is under extenuating circumstances.

So there you have it. How you can lock away your savings.

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If you want to lock away your savings, how can you do it?
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