Tap into top rates of interest,whilst retaining access to spending money.
Many women are living off the interest they earn on their cash deposits. But they worry about tying their money up in a higher rate fixed term deposit. Well here is a simple way around that problem:
You have a lump sum of 100,000 sitting on deposit at the Bank or Building Society and you can get 5% in a year-long fixed interest rate account and only 3% in an instant access account.
You need roughly 5,000 of interest from these savings to supplement your current income.You are attracted of course to the higher rate paying account,but are worried about tying your money up for a year.
Put 95,000 into the fixed account, and 5,000 into the instant access account. Use the money in the instant access account to spend over the course of a year,in the knowledge that the 4,750 interest earned in the fixed account will make up for it. Then you are effectively getting the higher interest rate and spending the interest.
This way you can make full use of the higher fixed rate accounts, but retain access to enough cash to spend in the meantime. However,if you need to get at the whole lump within the fixed term, this trick won't work for you and maybe fixed rates are not for you after all.