The benefits of saving money at high interest rates

Whether you’re planning for retirement or looking to build an emergency fund, saving cash is the key to unlocking financial stability. But you don’t need to lose out on earning high interest with significant cash deposits. In fact, you can use cash to build wealth. 

This guide covers the benefits of saving money to safeguard your wealth for the long-term. We’ll explore why saving cash is so appealing, and the ways in which savers can increase the value of their deposits with a few smart adjustments to their finances. 

How can saving money build wealth?

On the surface, it may appear that saving money is in direct conflict with building wealth. After all, cash deposits are one of the lowest risk assets you can own, predominantly kept on hand in case of emergencies.  

But saving money can offer advantages beyond its typical status as a financial buffer, provided savers seek out competitive rates. If you’re looking to build long-term wealth, high-interest accounts can strategically grow your savings and protect the value of your deposits against inflation.  

Here are just some of the financial goals you can achieve by saving cash in high-interest savings accounts: 

• Legacy planning: Higher levels of interest on your deposits can build up a substantial financial reserve, which you can pass on to future generations or gift as philanthropic investments.
• Sustained value: Economic uncertainty is a constant, which can reduce the value of your savings. Competitive interest rates ensure your cash retains as much of its value as possible.
• Peace of mind: You can spread your savings across multiple banks and accounts, protecting you in case a financial institution goes bankrupt. Your funds are also more accessible in a savings account than other investments, giving you peace of mind that you still have a financial safety net to fall back on.

Below, we’ll share some of the key benefits of saving money to preserve and grow your wealth for years to come.

Top five benefits of saving money at high interest 

1. Secures your financial independence 

Economic headwinds such as recession and inflation will reduce the value of your finances over time. If you’re not careful, your money could lose its spending power. 

High interest can counter this effect, earning you a percentage of the total balance in your account over time.

2. Helps you achieve life goals 

Savings can help you pursue personal aspirations, such as funding a child’s education, purchasing properties, or donating to charitable causes.  

Consistent saving ensures you have the funds available when you need them, without imposing painful financial constraints on day-to-day spending.

3. Offers flexibility for investing

Depending on the type of account you choose, saving cash can also provide you with greater financial flexibility. This flexibility allows you to pursue investment opportunities that other investors may miss due to limited cash reserves..  

For example, you might consider buying stocks and shares in a downturn, so you can benefit when their value goes back up. If you have substantial savings, you can decide whether the risk of a high return is worth a potential loss. 

4. Protects you against unexpected expenses

Medical emergencies, legal issues, or urgent home repairs pose significant financial challenges. 

Emergency funds put a buffer in place when the unexpected occurs. Depending on the size of the fund, you shouldn’t need to panic-sell your investments to cover costs.  

High-interest savings accounts ensure that the amount you set aside has a better chance of keeping up with rising prices. 

5. Supports your retirement goals 

A stress-free retirement depends on securing your finances. Pensions are typically placed in low-risk investments, so that your money is safe when you retire.  

Unfortunately, nothing is guaranteed, and you may find you need a bit of extra cash to enjoy your retirement to the full.  

By managing your savings in high-interest savings accounts and planning ahead, you can set up a financial cushion that means you can enjoy your golden years to the fullest. 

Our pension calculator is a valuable tool that can help you plan your retirement savings.  

You’ll gain an accurate projection of your retirement funds, so you can estimate how much you’ll have to work with and what you need to save now to make the most of your future.  

It’s never too late to start saving at high interest

Wherever you are on your financial journey, maximising the value of your savings is always worthwhile.  

Discovering the best accounts is the first step to strengthening your finances for years to come.

Build your cash wealth with Flagstone

Flagstone is the key to strategic saving. Our cash deposit platform makes it easy to move your money around and benefit from competitive interest rates. 

Gain access to accounts with 60+ banks and let your savings grow.

Create an account to get started