How saving with a fixed rate bond can be rewarding
Lots of people think of putting cash into a savings account or something like a fixed term bond as a chore. And unfortunately, this can really put some people off and mean they spend all their money as they make it and never build up any reserves. But actually, saving can be worthwhile. And by looking at fixed term bonds – which are loans that you make to a company or the Government for a fixed period, during which they pay you a fixed rate of interest, otherwise known as fixed rate bonds – in a slightly different light can really encourage you to save and provide for your future.
See savings in a new light
Savings don’t necessarily need to be for the boring things in life – but can be used for things that you really want and will look forward to. In fact, savings can be used for the highly indulgent things you might not be able to afford immediately or on a day-to-day basis.
Most people aspire to some luxuries in life. Maybe it’s a sports car to take out on nice, sunny weekends. Or perhaps you’d like to treat you and your partner – or even the whole family – to the holiday of a lifetime. Or you might even want to have a new bathroom or kitchen, extend your home to give you more space or add a conservatory. All of these are fun things to look forward to and can help make it feel easier to save.
Of course, it’s really important to make sure you can comfortably cover your monthly outgoings and you should set your saving at a level that’s right for you. But after a few years, who knows – maybe you’ll be driving a nice new sports car.
Peace of mind
Of course, while you may choose to use your savings on something fun, there is always the peace of mind that you have cash invested if you need money in the future. It’s usually better to leave money in fixed term bonds until the end of the term – because otherwise you might have to pay a penalty to remove your cash. But you will have a very clear end date and be able to plan around that. So say, for example, your home needs some repairs but they are not urgent, you might be able to plan ahead and tie the work in with when your fixed term bond matures.
So there you go. Savings can give you peace of mind. But they can also help you dream about something you’d really like – and know that you’re moving towards making that dream a reality.