How to save for home improvements

Making improvements to your home, such as converting a loft or adding a conservatory can add resale value to your property, as well as increasing the amount of living space available to you. However, making major modifications to your property such as these can cost a considerable amount of money. You could of course take out a loan to cover some or all of the cost of home improvements, but this means that you will effectively be paying a lot more for them in the long term. If you were to save up the money in a high-interest savings account, you would have to wait a little while until you could make the modifications, but it would work out a lot cheaper. This is because you would have no interest to pay, and you would earn interest on the money you have put away in the savings account.

There are lots of different types of savings account available. Usually, the highest interest rates are available from Cash ISA accounts. With a Cash ISA, you do not have to pay any capital gains tax on the interest that you earn, which means that you will earn more overall. You can deposit up to £5,100 in a Cash ISA over the course of the financial year (April 1st to March 31^st). However, if you need to save a larger amount than this, or you have already used up your ISA allowance for the year, then you may have to look into non-ISA savings accounts.

Generally speaking, the higher the interest rate offered by a savings account, the more strings are attached. Some accounts require you to give a certain amount of notice before you withdraw funds from the account, typically multiples of 30 days. Others require you to deposit a certain amount each month if you want to get the best rates. While it is a good idea to try and get the highest possible interest rate, it is important to choose an account that is suited to your own circumstances.

Some accounts will offer a fixed rate of interest, which means that the interest rate will stay the same for a guaranteed length of time. This makes it easier to budget, but you may find that you can get a higher rate of interest with a variable rate account, which offers no such guarantees. For great deals on ISA and non-ISA savings accounts, visit the Santander website.