Five ways your bank can help you save!

Need a hand getting into the savings habit? Believe it or not, your bank can help...

Having read that headline, I know what you’re thinking... I’ve gone mad – again. Banks don't help you save money, they just eat it up.

But no, you’re wrong – this simply isn’t the case (well, I may be a little mad, but that’s neither here nor there). In this article, I am in fact going to prove to you that your bank can help you to save money.

Save with Sainsbury’s

If you’re a fan of shopping in Sainsbury’s, you may already have applied for some of its financial products. The Sainsbury’s Finance Easy Saver, for example, offers a fairly competitive interest rate of 2.50% for 12 months.

Admittedly, the interest rate is not quite as high as the market-leading 1st Class Postal account from the Coventry Building Society which pays a rate of 3%. Nevertheless, the Sainsbury’s account is still competitive, and it has a lot more to offer than just an interest rate.

For a start, if you deposit a minimum balance of £5,000 within the first 30 days of opening the account and maintain this amount for two years, you will benefit from double Nectar points on all of your Sainsbury’s shopping! These points can then be used for a wide range of rewards, such as days out or holidays.

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In a nutshell, if you open the Sainsbury’s Finance Easy Saver, you’ll be given a SaveBack card. Every time you go to pay at the checkout, all you have to do is hand over your debit card and SaveBack card, tell the checkout operator how much you would like to save, and the money will then be transferred into your savings account (funds will be credited to your account within two bank working days).

It’s a very simple way of reminding yourself to save a little each time you go shopping. After all, if you find out you’ve saved £5 on your shopping one week (perhaps as a result of various discounts and offers), why not simply transfer that money into your Sainsbury’s Finance Easy Saver? It might not sound like much, but if you remember to do this each week, your savings will build up in no time.

Just bear in mind that the Sainsbury’s Easy Saver only allows you to make five penalty-free withdrawals in 12 months – but hopefully this will stop you from dipping into your savings whenever you want! It's also worth noting that the interest rate on the account drops to 0.50% after the first year.

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Save the change

If the idea of asking someone to transfer money into your savings account every time you go shopping sounds like too much hassle, Lloyds TSB offers an alternative through its Save the Change scheme.

If you have a Lloyds current account, such as the Lloyds TSB Classic with Vantage, every time you spend on your debit card, it will round up the amount you’ve spent to the nearest pound and then transfer the difference into a Lloyds savings account. It’s that easy!

The downside is that you will need to have both your current account and savings account with Lloyds, so you may not be getting the most competitive deal on the market.

That said, the Lloyds TSB Classic with Vantage account does offer a pretty great deal because as long as you have between £5,000 and £7,000 in your account, you can earn up to 4% interest!

Alternatively, if your balance is between £3,000 and £5,000, the rate drops to 3%, and if there’s £1,000 to £3,000 in your account, the rate falls to 2%. Anything under £1,000 only earns 0.10%.

Get sweeping!

If you have your current account and savings account with the same lender, but it’s not Lloyds TSB, there is another option to consider.

Some lenders, such as First Direct and Santander, offer a sweeping facility. This means that once a month, any spare cash left in your current account will be moved into a higher rate savings account. This can be a great way of saving with minimal effort - just make sure the rate on your savings account is competitive, otherwise it may not be worth doing.

What’s more, if you do bank with Santander, you can enjoy the Santander Preferred In-Credit Rate Account which offers a fabulous interest rate of 5%! That beats what most savings accounts are paying these days!

Earn cashback

If you’re getting into the savings habit, but feeling a little short on cash to save, your bank can also help you to earn extra money.

If you religiously pay off your credit card balance in full each month, it’s well worth applying for a cashback credit card.

For example, the American Express Platinum Cashback Card offers 5% cashback for the first three months, up to £100. Thereafter, you'll get 0.5% cashback on the first £3,500 of spend, 1% from £3,501 to £7,500, and 1.25% from £7,501 upwards. Bear in mind, however, that American Express isn’t accepted everywhere, and the 5% deal will expire after three months.

Alternatively, the Egg Money Mastercard offers 1% cashback, but you will need to pay a monthly fee of £1. You can find out more in Top reward and cashback cards.

Get £100 cash!

If a cashback credit card isn’t for you, you might be more tempted by the offer of £100 cash. And that’s exactly what you’ll get if you apply for the First Direct 1st Account, or the Alliance & Leicester Premier Current Account.

Bear in mind you will need to pay £1,500 into the 1st Account and £500 into the Alliance & Leicester account each month. First Direct will also give you another £100 if you decide to leave within 12 months – however, this seems unlikely as First Direct is renowned for its excellent customer service. You can then transfer this £100 cash into your savings account!

So hopefully you will now believe me when I say that your bank really can help you to save money!

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