It’s always nice to have extra cash just lying around, but sometimes you can end up saving hundreds or thousands of pounds that simply sit there. Having all that extra money poses the problem of it simply sitting there and being useless, so what can you do with it instead?
There’s a lot of things that you can do with it. The best things will ultimately benefit you in the long run. So instead of choosing to spend all that money in one fell swoop, hold onto it. Better yet, you could take that money and multiply it with enough time.
Take a look at the top 4 things you can do with your extra money so that it isn’t wasting space underneath your mattress!
1. Put That Cash In a Savings Account
The safest place to invest your cash will always be a basic savings account at your local bank. While most bank accounts will currently only return a couple of percent a year. I just checked with Clydesdale Bank and they are currently advertising up to 2% Gross/AER on a term deposit, which is higher than most easy access savings accounts. An Individual Savings Account (ISA) is an even better option as it is a more tax efficient way to invest your money, although you can only shelter up to £11,280 in ISAs.
2. Buy Some Shares of High Dividend Value Stocks
It’s true that some people are immediately turned off by the idea of investing in the stock market. For many people, the idea of investing in something that’s currently down is downright outrageous.
Investing would be silly if every publicly traded stock was falling, but that simply isn’t the case. There are many different varieties of stocks that are doing great right now. The stock market offers a high-risk, high-reward opportunity for investing your spare cash.
The only problem with investing in stocks is that you need to have enough cash to cover broker fees and other commission charges as well as the price of shares. You may also not be a stock market genius, which could further put you off from this idea.
3. Invest in a Mutual Fund
A mutual fund is one of the more “safe” investments you can put money into. Mutual funds work by having a company pool funds from a number of investors. This allows investments to be made at one time and in bulk, which makes it much cheaper to buy versus if you were to buy the same share of stocks. This company will then diversify its investments in several vehicles such as stocks, bonds and mutual funds. In turn, this is what makes mutual funds a bit safer to invest in.
While your mutual funds can differ depending on your individual agreement, you’ll earn a certain amount of money based on how well your investments do.
4. Lend Your Money to a Credit Union
If you join a local credit union, you can invest your money in a way very similar to the way banks set up loans. The added benefit you will find is that because credit unions are owned by their members, they can offer better interest rates. You’ll also see a larger share of the returns.
Two things you’ll want to look into when it comes to credit unions are the returns on savings accounts. Ensure that each has a higher interest rate than you’d get at your local bank.