Cash is the safe bespectacled librarian to the more flamboyant rock star that is shares. It will keep your money safe but it won't work hard for you over the longer-term.

There's a lot to be said for boring and safe. You know what you're getting. Up to £85,000, your cash is guaranteed in most institutions by the Financial Services Compensation Scheme. But if you have at least a five-year timeframe for saving we think you need to consider the stock market. 


4 things you need to know

  • Interest rates are at a measly 0.5%
  • Inflation is higher so your cash savings are actually going backwards in terms of purchasing power
  • Savings accounts often have better rates than cash ISAs
  • Basic-rate taxpayers now get £1,000 of tax-free interest every year



The basics

Most financial advisers will suggest you try and save between 3 and 6 months' salary in cash to cope with life's unexpected emergencies that might crop up. 

The really important thing to be clear on with your savings is what your timeframes are. 

If you are saving for something you will need the money for in 2 years, then cash is a no-brainer. Imagine sticking a £30,000 house deposit stash in the stock market, only to have to sell up and take the money out in the middle of a market wobble. 

Conversely if you're saving for more than 5 years, having everything in cash makes very little sense. The stock market is likely to do better. Time is on your side and you won't need to be a forced seller. 



Guide to Cash Savings

Cash – the bedrock of your savings, but rates are at historic lows.

This factsheet gives you the Boring Money tips on cash.


Cash facts



Best online rates as of April 2018

These are some of the best available rates as of April 2018. Cash rates move around so check online and also read the terms and conditions. That lovely advertised rate might only be payable on the first 50p. 

  • 1 year ISA - Tesco Bank - 1.45%
  • Easy access ISA - The Coventry - 1.25%
  • 1 year fixed rate bond - Kent Reliance - 1.85%
  • Kids regular saver - Halifax - 4.5%
  • Junior ISA - Coventry - 3.5%

Basic-rate taxpayers now have £1,000 in interest they can get from savings accounts and not pay tax on. Higher-rate taxpayers get £500 free from tax.  

So shop around for the best rates. Don't just go for your bank's cash ISA because you feel lazy and that's what you've always done!