The Money Blog

One common phrase in today economy is the phrase “making the most of your money”. You will find this phrase used in supermarket and shopping advertisements but now commonly used in the area of savings and investments. The question I will be trying to answer is just how do you “make the most of your money” in the area of savings and investments.
If you have some extra money each month after your expenses the best thing to do with this money is to find a bank that we invest the money for you and make the money work hard for you. Burying the money in a coffee Jag out in back yard or hide it underneath your mattress will never see the money grow but in fact could depreciate in value as a result of inflation. Depending on how much you have to save, you could be currently earning upwards of 6% on top of that money. That means for every £100 you deposit in a savings account, the bank add £6.00 on top every year. That doesn’t seem like much, but in a year of monthly deposits, you could earn almost £80 for just having your money sitting in the bank.
As an incentive for you to give a bank your money, they offer higher introductory savings rates and other deals such as interest rates that pay you a set amount of interest on your money over a specified time limit monthly, quarterly, or yearly.
With all that said, how do you find a bank that will pump up your investment? Do your research. Search for banks with the high percentage rate for your money. The general rule is the higher the percentage rate the more money you will generate.

As the world economy, especially the UK and United states continues to show signs of recession and slow growth. Debt obligations rising for many people and interest rate not likely to fall in the coming month due to raised inflation. It is expected that many people may be consider filing for bankruptcy.
Before taking this action it is important to know some basic trued and consequences of such action. Below are some frequently asked questions about bankruptcy and answers which I hope you will helpful.
When should I start filing for bankruptcy? - Bankruptcy should only be filed only until the last minute before being taken to court by your creditors. This is because in certain cases an individual can work with a credit counseling agency to help lower their monthly payments and learn how to manage their finances in a better way.
How long will my bankruptcy be on my credit report? - Bankruptcy filed can remain on a person’s credit report for as long as ten years. This will have a negative impact on your credit score, but after the bankruptcy period is over your debts will appear as zero on your credit report.
Can I have a bank account after I have filed for bankruptcy? - There is nothing in the bankruptcy legislation which prevents a bankrupt from holding an account, but you should tell the bank or building society that you are bankrupt.
It is the bank’s decision as to whether to allow an account to be opened by the bankrupt.
How do I make myself bankrupt? - Go to the court within whose jurisdiction you live, obtain the forms and find out how much the fee will be. Fill out the forms and return to court with the fee payable. Above all take advice before you take what is a very major step.

Saving accounts are great way for investing your money with minimum risk to your investment. But not only useful for investing your money but can help you keep your expenses under control. Putting away a set amount of money each week or month and you will surprised at how quickly this money can add up. A lot of saving accounts only require a pound to open an account while others may want you to deposit anywhere from 5 pounds to 1000 pounds a month.

Some types of savings accounts offer you with latest money saving techniques. By adopting these techniques you can save your money from flying away through avoidable costs and unnecessary expenses every month.

Some types of savings accounts helps you save toward important holiday seasons. This allows you to save money for Christmas. If you start it early enough in the year by the time Christmas rolls around you can have a nice amount for your holiday shopping.

Some type of savings accounts offer by some banks link your debit card with your savings account. Every time you make a purchase using your debit card the amount is rounded up to the next pound and the extra is deposited into your savings account. Some of these banks will even match the amount deposited by a certain percentage.

Some savings accounts offers internet banking facility for convenience of their clients. This makes it very easily to monitor your savings and personal spending via online banking and stay within your budget.

Some savings accounts allow you to borrow money from your bank using the money in your savings accounts to secure the loan. This can make it easier to get an unsecured loan should you need it.

The rule of 72 is methods for estimating an investment’s doubling time. In another words, it is a measurement of how many years it will take your money to double given a fixed annual rate of interest.

To estimate the number of periods required to double an original investment, you divide the 72 by the expected growth rate, expressed as a percentage. The rule is expressed in this very simple equation: 72 / interest = No. of years it takes for your money to double

For example, using the Kaupthing Edge fixed term deposit rates of 7.01 AER (as of 16/june/2008) as our fixed annual rate of interest. A cash deposit of £1000 in their savings account will take (72/7.01 = 10.2) 10.2 years to double in value. So an initial £1000 investment will be worth £2000 in 10.2 years.

So after 20.4 years a deposit of £1000 will be worth £3000 and after 30.4 years your investment with be worth £4000. However the drawback of using the rule of 72 is that it does not take into consideration the inflation of an economy. Inflation is the rate of increase in the level of prices for goods and services, which affects the purchasing value of money. Between the years when the cash is deposited and when it is taken out of the account, inflation can builds up and starts to corrode the savings.

Any type of investing can pose a risk. Unless you are investing in a savings account (secured with insurance by the government) or you are not guaranteed that your original principal (the amount of money you originally invested) is going to be protected. Investments in a savings account usually produce a much lower return than investments in risky assets such as stocks and share.

The key to making good returns on with riskier investments such as investing in shocks and shares is to diversify your investments. Before you begin to diversify your stock portfolio, it’s important to make absolutely sure that you know what diversity is. Diversification means creating an investment portfolio that contains different types of investments within each of the major asset classes — stocks, bonds, and cash.

Diversification isn’t just about increasing the sheer number of your investments. It’s about striking a balance among various investments in your portfolio to reduce your exposure to risk and take advantage of the full range of opportunities in the market. With diversification you will almost be certain that some asset classes will being well when other asset classes are not doing well.

The easiest way to diversify your investments is choose mutual funds. All funds own a number of investments, and some funds spread their investments broadly within an asset class, owning stocks or bonds of different sized companies in different industries or sectors. Provided the fund isn’t too narrowly focused, it may provide you with ready-made diversification.

Besides mutual funds, it’s usually a good idea to buy some short-term investments such as CDs and money market funds as well. This is because you not only want to diversify within a certain asset class (in this case, mutual funds or stocks), but you also want to Diversify across time horizons for further diversification.

No mater the type or situation of your investments diversification is still important so that you investments as a whole will be protected and less at risk than they would be if they were not so diversified.

One important thing to consider when opening a saving account to put your money into is the interest rate being offered by the bank. You will need to compare the bank saving account interest rate with other banks offering the same type of service. Commonly the rate being offered with is based on the type of account you choose and the balance that will remain in there every month.

The question for many is how to determine which saving account to use and which interest rate is the right for them. The answer is by comparing the saving account interest rate along with the obligations of the account you choose. By comparing both the interest rate and the obligations you will be able to see if the interest rate offered is worth the commitment they are asking you to make. For example, most banks will offer you a basic savings account with minimum fees and no minimum monthly balance. That means you can keep in the account any amount you please, you can deposit and withdraw finds for no fees. But, the interest rate you get for our money will be only minimal.

There are saving accounts which offered high interest rates. But these accounts may require a minimum monthly balance of one thousand pounds and will charge hefty withdrawal fees. In most cases no interest is pay if the average monthly balance is below the minimum agreed on. This type of saving account ties your money up. Therefore, before opening a new saving account, you need to decide how much money you can afford to keep in the bank, and as a result which saving account plan work out best for you and gives the highest interest.

Other important issue to consider when deciding which saving account to put your money into is if your money is protected by the government or insured by the bank and to what amount.

Make sure you read and understand the fine print, and you are able by abide by the terms that will provide.

If you’re like most people, you’ve heard a lot about online banking but probably haven’t tried it yourself. However over recent years online banking has become increasingly popular. Online banking (Internet Banking) can be said as the mode of banking where bank services like transaction, payments, etc are executed over the internet through a bank’s secure website of a retail or building society bank. Online banking allows us to make deposits, withdrawals and pay bills all with the click of a mouse.

There are many benefits to have an online bank account.

1. Convenience - With online banking you do not have to even leave the house or pick up the phone in order to conduct your banking transactions. Thanks to the Internet you can now perform these transactions from the comfort and privacy of your own home, and at any time of the day or night, so there are no time constraints to worry about.

2. Transaction speed - Many people with full time jobs have had to rely on their lunch hour to try and get to the bank and conduct a transaction in the past. Often this resulted in lengthy queues and rushing around, with little time to actually enjoy your break and have a bite to eat. With online banking you can conduct your transactions or check your statement at the touch of a button, saving you time and hassle.

3. Special incentives - Often you will find that online banks offer special incentives and offers to those that open up a bank account or interest savings account with them, such as a sum of cash credited into the account once you have been a customer and met the necessary requirements for a specified amount of time.

4. Environmental friendly - Online banking also eliminates paper waste, which is a plus not only for those who have to handle all the paper work, but also for the environment

Just as with anything else, there are disadvantages to online banking.

1. Time taking to open an account - Online banking sites can also take a while to start up and can be difficult to learn at first. Some banks require customers to provide some form of photo identification in addition to signing a form at one of their branches.

2. The trust: For many people, the biggest hurdle to online banking is learning to trust it. Did my transaction go through? Did I push the transfer button once or twice? Of course, you can overcome any uneasiness by printing the transaction receipt. This receipt will conform whether or not your transaction has gone through successfully. However, most online banking sites provide tutorials for online banking.

Clearly, online banking has both advantages and disadvantages. But the advantages out weight the disadvantages. After a few transactions you will agree that the online bank provides you better control over your finance.

There is no doubt about the fact that identity theft is on the increase. More and more people are losing their identities and money each year. By knowing how to protect yourself while banking on the Internet you can reduce your risk of identity theft while still taking advantage of the numerous advantages online backing.

1. Never use unprotected PCs at home, cyber-cafes or workplace for Internet banking.
2. Never keep your Login PIN or password and credit/debit card(s) together.
3. Never leave the PC unattended when on Internet banking in a public place.
4. Never reply to e-mails asking for your password or PIN.
5. Never use the same Login PIN or password for your online banking to register for other internet services that requires you to provide a pin or password.
6. Never visit banks’ website by clicking on a link in an e-mail arrived in your inbox, always typing the URL in to the address bar.
7. Before using Internet banking, verify the domain name displayed to avoid spoof websites.
8. Log off and close your browser after finishing using Internet banking.
9. Check your monthly credit/debit card statement for unusual activity.
10. In public never let a stranger assist you using your online banking. Protect your Password and login PIN