Shops and supermarkets are stocked full of Christmas decorations, gifts and food as the festive shopping season starts, but while many consumers may be focusing on Christmas 2021, now is the ideal time to start saving for next year’s Christmas.
One of the best ways to manage the cost of Christmas without incurring debt, is to be prepared and having savings already stashed away, and gaining interest, in preparation for the festive period.
After the last 18-months that has seen savings rates hit record lows, average rates on savings accounts are now starting to rise, so now is the ideal time for savvy savers to open a savings account to start stashing away money for next year’s Christmas.
Consumers who are good at saving may want to open an easy access savings account that allows unlimited further deposits that they can specifically dedicate to their 2022 Christmas fund. The current top easy access savings rate is from Cynergy Bank which pays 0.66% AER, which includes a 0.36% bonus for 12 months, on its Online Easy Access Account (Issue 42).
Eligible deposits with UK institutions are protected by the Financial Services Compensation Scheme (FSCS) up to a maximum level of protection of £85,000 per person per institution. All new savings or bank accounts provided to UK customers are now covered by the FSCS.
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Meanwhile, savers who struggle to regularly save may want to consider opening a regular savings account. These accounts require savers to deposit a pre-specified amount each month into the account, which can help those who normally struggle to establish a savings habit. Those considering opening a regular savings account should check that the account has a 12 month term, or if money can be withdrawn from the account before next year’s festive shopping season begins. As well as this, savers should note that interest on these accounts are paid differently to other types of savings accounts – more information about this can be found here.
The top rate currently being offered on regular savings account without opening restrictions is 2.00% AER on accounts from Newcastle Building Society and West Brom Building Society. Meanwhile, some banks and building societies launch regular savings accounts specifically designed for those saving towards Christmas, such as Yorkshire Building Societies’ Christmas Regular Saver.
Visit our regular savings accounts comparison chart to compare all the best regular savings accounts currently available.
Although consumers should avoid borrowing to pay for Christmas, those who do not have savings to meet the full cost of the festive season should consider using a 0% purchase credit card. A 0% purchase credit card offers an interest-free period in which borrowers can repay outstanding balances on the card. The length of the interest-free term varies and interest is added to any outstanding balances once the interest-free period ends. Consumers considering using a 0% purchase credit card should aim to repay the balance in full, or clear as much of the debt as possible, before the interest-free period ends.
Visit our 0% purchase credit card comparison chart to compare all the best 0% purchase credit cards currently available.
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