Keeping an 'emergency fund' available to deal with unexpected large expenditure items is good planning - but I want to make sure that the money is working hard and generating as much income as possible. This account allows me to accumulate cash to hopefully move in due course up to the next level of the Income Pyramid (Level 3) - a high-yield deposit account with an even higher rate of interest.
I have chosen BM Savings eSaver Account, Issue 2 (this is the old Birmingham Midshires, which is now part of the Bank of Scotland). The account is currently paying 2.75% (gross), although this rate is not described as 'fixed' and therefore is not guaranteed for any period. This rate is also less than inflation, so the price of 'easy access' is a slight reduction in the real (after-inflation) value of the money.
We had an existing account with BM Savings that we ran down when the (then attractive) interest rate was reduced a couple of years ago. So, although it is not the best rate available (although it is among the best), re-opening the account and transferring money there was fairly easy - the account is online and is linked to my spouse's online current account. The interest is paid monthly into the linked account.
So, for the moment, job done - but I will need to keep an eye on that rate because inevitably it will be reduced at some point!
I am not a financial advisor and the information provided does not constitute financial advice. You should always do your own research on top of what you learn here to ensure that it's right for your specific circumstances.
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