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How to earn an extra £1,000!

How to earn an extra £1,000!

Category: Savings

Updated: 31/10/2008
First Published: 25/06/2007

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The average UK saver has accumulated just over £20,000 worth of savings and the difference between the best and worst paying savings accounts can be as much as £1,000 in lost interest every year.

Investing £20,000 in the best buy Icesave savings account would give you £1,187.48 in gross interest, compared to £187.50 gross interest if you invested the money in the Alliance & Leicester instant access savings account.

Internet savings accounts are not only available 24/7 but often pay much higher interest rates. Perhaps this is the reason why searching online to find the best savings accounts is now more popular than ever.

Sainsbury's Bank is currently the best buy Internet savings account with a rate of 6.0% on balances of £1. This compares to a rate of 3.93% on balances of £1 offered by Barclays Bank's Day to Day savings account, which is a branch-based instant access savings account.

With inflation (RPI) currently reaching 4.6%, many branch-based savings accounts aren't keeping pace with their online savings accounts counterparts. So, keeping your savings in a branch based savings account could see the real value of your money decline over time, as well as missing out on hundreds, if not thousands, of pounds in lost savings account interest every year.

So, don't let your high street bank get away with paying you a shoddy rate of interest on your savings account – going online could literally earn you a small fortune each year.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.