Earn 5.8% on your easy-access savings!

You can get an easy-access savings rate at twice the 'top' rate of 2.9% with low risk, but a little time!

The point of this article is to help those people who are willing to put in a bit of effort for a low-risk way to boost their account balances, of which there are quite a few of you. If you're not one of that number who like to while away your time on money saving and penny pinching, I recommend you stop reading now to save yourself the aggro.

If you want to do the best you can with your savings at low risk, read on.

With the top easy-access savings account, the Post Office Online Saver, paying just 2.9% before tax, you can make some significant improvements to that rate if you're organised. You have to consider all the money you've got with banks and try to nudge up your rewards and interest whenever an opportunity presents itself. You move small bits of money around whenever you see the right deal in order to boost your effective total interest rate.

You can read more about the Post Office account in Get £322 richer in minutes.

Step one, boost the rate on short-term savings

To start with, consider what you can do to improve your interest rate on your very short-term savings, i.e. your current-account balance. Take the Santander Preferred In-Credit Current Account, which gives you £100 cashback plus 5% interest in the first year. (Read more about its small print in 5 reasons you should ditch your current account.) I'm going to assume your average current-account balance is £1,000 for my calculations.

Step two, deal with your emergency savings

Next, you open up the Post Office easy-access account paying 2.9% and stick your more steady savings for big purchases and emergencies there.

Step three, give your savings another boost

You could also open up a regular saver account. These typically pay you a fixed interest rate for one year. Some other accounts do the same, but those almost always tie your money in and their rates aren't attractive enough to be worth that.

The first downside is that you can't put much in to these and must drip it in, but, as you will soon see, it all adds up. The second is that these don't always fit into the 'easy-access savings' bracket, as you often can't access your money early without penalty.

Right now, though, Norwich & Peterborough allow you to save up to £250pm offering 4% (5% for families) with some potential to make withdrawals and Saffron Building Society offers 4% on £200pm with no conditions limiting withdrawals. (There is a regular saver paying a lot more, but the catches are rather onerous. Read about it in Earn 8% on your savings.)

In today's article we're not talking about saving more, we're talking about boosting the return on our existing savings. This means you'll be paying into your regular saver from your easy-access savings account, not from new income, to boost the final interest rate. To do this, transfer the £250 from your current account to the regular saver each month, and replace the money in your current-account with money from your easy-access savings account.

Easy!

The results

This table shows you how you might do over the next 12 months with those techniques:

All effective interest rates are before tax and for the first year only.

My figures don't take into account that transfer times might vary leaving you with a few days loss of interest each month, but the banks are getting faster and sometimes now there is no loss whatsoever.

The effective interest rate you were expecting was 2.9% before tax or less. Indeed, you would be earning less than that if your short-term savings (your current-account balance) is earning nothing. As you can see, though, this effort has made a significant difference.

In every case you're about £175 better off versus using a normal current account and the top savings account only. In effective interest rate terms, your outperformance gets smaller the greater your savings. Those with more savings need to work harder to get your rates higher.

Some techniques are less rewarding

Using the regular saver account in this way makes a difference of just £25, so you'll need to be really keen to save money to go to that trouble. However, if you open several regular savers and use the same techniques, you can boost your overall return and interest rate even further.

More ways for the really, really keen

There are other really keen ways to boost those savings and the overall interest rate, too:

• You could time your transactions so that more money is sitting longer in your Santander account, and therefore earning the highest rate of interest for longer.
• Just because I'm talking about the annual interest rates, that doesn't mean you have to wait a whole year before switching account again. You can boost your effective interest rate further by switching current or savings accounts more frequently than once a year.
• You can use tax-free savings accounts – cash ISAs – to improve your rates further. Bear in mind that when switching between ISAs the transfer times are on average quite a bit longer than 'ordinary' savings accounts, which means you can lose many days' interest. Transfer times are steadily coming down though.

It's an ongoing mission

You can't do this once and forget it, you have to maintain it:

• Keep reading our articles for new and better bank offers that you can switch to.
• Read all your post to ensure you don't miss any reductions in your interest rates and other rewards.
• Make a note in your calendar of when special deals are due to end. Shop around again when these things happens to you.

These are all fiddly techniques, so they won't be suitable if you could do a bit of well-paid overtime instead, but true money savers could get organised enough to implement them.

More: Loan rates are racing up | Five great British money taboos