How to Make Your Money Work Harder


It is always a good idea to get your money working as hard as possible for you. Think of each pound you invest as one more worker in your financial team. Make it a habit to shop around for the best deals. You will notice that the amount of interest organisations will pay to borrow your money varies widely, and you may find all the options bewildering at first. So here are a few tips to help you understand the factors that affect interest rates.

  • Time: organisations will pay you more interest if you agree to let them use your money for a longer period. You may agree, for example, to tie up your money with them for two years, and they will pay you a higher rate of interest if you agree not to touch the money during this period.
  • Risk: if you agree to accept a level of risk with your money, organisations will pay you a higher rate of interest. For example, put the money into an account that lets a bank or building society invest it on the stock market, and in return for the higher risk you have the prospect of a higher return. You may get more money if the stock market performs well, but you may also lose money if the market falls. The higher the level of risk, the more interest organisations are likely to offer in order to make the deal tempting to investors. It is important to be aware of the potential risks, however, and not to risk money that you cannot afford to lose.


  • Saving the borrower money: if you agree to invest your money via a postal account or an internet account, you will usually be paid a higher rate of interest. This is because the organisation that is borrowing your money will be making savings on reduced branch-running costs, so will be able to pass some of these savings on to you in the form of higher interest.

These are just a few reasons why some investments offer better interest rates than others. It is outside the scope of this article to offer specific suggestions as to where you should invest your money, however. Each person’s situation and needs are different, so when in doubt you should always consult a qualified independent financial adviser who will do a thorough check on your individual situation and needs and recommend products that suit your circum¬≠stances. Remember, however, to check the adviser’s credentials and ask for details of his or her qualifications. Ask if the adviser is authorised by the Financial Services Authority (FSA). The FSA is a powerful statutory regulator that provides valuable protection to the consumer. Its powers are wide-ranging and include the authority to impose penalties for various offences and bring disciplinary proceedings and criminal prosecutions where appropriate. It can also demand compensation for consumers.

You should also ask how your financial adviser is going to be paid. Some advisers will charge you in full for their services. Other advisers will charge you nothing at all or only part of their fee, but will instead receive commission or an introduction fee from the company whose products they are selling. If this is the case, you need to know so that you can decide if the adviser’s advice is being influenced by this. There are many good and reliable financial advisers out there, and simply getting commission from a company doesn’t necessarily mean your adviser is giving you wrong advice. However, if you feel that your adviser is not giving you objective advice, or is steering you towards a certain product without fully taking into account your circumstances, then you may be better off with a different adviser. The financial services industry is taking steps to stamp out the practice of financial advisers selling products that may be unsuitable for the customer merely to earn better commission for themselves, so if you are in any doubt at all, contact the FSA for advice.

Finally, you should be aware that some financial advisers are tied to a particular company – this means they will only be able to offer you products from the company they represent, and not products from other companies that may represent a better deal. Your adviser should tell you if this is the case, and what level of advice he or she is able to give you. If you are in any doubt, always check: you should be clear about whether your adviser is independent or tied to a particular organisation, and what level of advice you can expect from him or her, so that you can be sure you are getting to know about all the best deals on the market.

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About the Author: Marie Mayle is a contributor to the MegaHowTo team, writer, and entrepreneur based in California USA. She holds a degree in Business Administration. She loves to write about business and finance issues and how to tackle them.

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