The Best Personal Finance Products

Financial products flummox a lot of people, and customer apathy is often a particular winner for banks. People stay with their current bank out of loyalty, or they just can't be bothered to go through the hassle of changing accounts when there's only 1% of interest at stake. However, in the long term, the perks of new bank accounts and credit cards really add up, and the savings can be hundreds of pounds a year.

The Best Current Account

Current accounts are normally the products that are most overlooked when it comes to switching providers. People tend to stick rigidly with their bank for a long time, and often for life, but changing banks really can make a difference. If you've been with your current account for years, compare it to Alliance and Leicester's current accounts. Presently, this is the most competitive bank on the market. It offers 6.5% on balances of up to £2500, which is better than most savings accounts. If you're not a big saver then you can also get up to £2500 as an interest free overdraft for one year, which beats most of the graduate accounts on the market. Additionally, take a look at RBS for current accounts.

Best Way to Save

There are many different ways to save and invest: ISAs, savings accounts, bonds, stocks and shares - they all have their benefits, and getting the right one could put you in very good stead. In a basic sense, if you think you'll need access to your savings, then having either a savings account or an ISA. They usually offer better rates than current accounts, especially for larger amounts. The leading AER for savings accounts at the moment, according to the Motley Fool website, is 6.43%, by ICI.

Be aware that you get a yearly maximum deposit into an ISA (it isn't topped up if you withdraw), which is between �3000 and �7000 depending on which product you choose. Although you may not be able to deposit as much, anything you do deposit in an ISA is tax free.

Best Way to Borrow

Credit cards can be expensive things, but there are many ways to get a great deal of benefits if you're particularly shrewd. Credit card companies give customers a range of incentives so that they spend a lot on their card (money is made from the retailer at about 1% per transaction). Getting the best credit card really depends on your circumstances, but there are a number of clear winners for a particular purpose.

The first of these is the MBNA credit card (also Virgin Money card) which gives you 0% on balance transfers for 15 months (2.98% fee). This is an excellent way to clear existing credit card debts, and completely cut interest payments for a period.

Second up is the 0% on purchases card. Effectively this means any purchases you make will not accrue interest charges for a fixed period. The longest lasting 0% on purchases cards available are by HSBC and Halifax, which both offer 12 months.

Next up is the king of cashback and bonuses for spending. American Express Credit Cards really have a good range of cards that can give you bonuses, and the Platinum American Express Card gives some very competitive cashback rewards (5% for the first three months). Other cards also offer incentives to travellers and more ethical ways to spend. Take a look at the American Express website for more.

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