Savings and investment tips for home improvements

What is it that makes your house a home? Most people would agree it’s the furniture, decoration, pictures, children’s paintings and the odds and ends that fill every room giving each one character and warmth.

We build up these possessions and memories over years and as a result we have no real idea of the cost. Plus, some things such as photographs, your child’s first drawing and your great grandmother’s dresser are irreplaceable and invaluable.

So, how do you go about replacing furniture if you want to redecorate your house and buy everything in one go? You can borrow the money, but who really wants to take on more debt in the current economy?

The other option is to do it the good old fashion way, save up for it. Although the Bank of England’s base interest rate remains at 0.5%, there are still some decent savings accounts and investment opportunities on the market. Santander savings and investments are some of the best on the market at the moment. So much so they have just won the title of Personal Finance Provider of the Year at the 2011 Moneyfacts awards.

If your saving plans are small scale, a simple online instant access savings account is probably your best option. Currently you can get 3.10% gross AER on your savings with Santander’s instant access eSaver, plus you can open the account with just £1.

If you are looking for a more long-term investment and a better rate of return then a fixed-rate bond is a better bet. Again with Santander you can start saving just £1 but if you are willing to lock £25,000 away for two years you can get a rather appealing gross AER of 3.8%.

These types of accounts are risk free and offer a fixed rate of return. However, if you choose to invest in the stock market through a portfolio investment managed by a fund manager, you can make a lot more money. However, you need to remember a stocks and shares investment comes with a higher level of risk, even when it’s managed by an experienced fund manager. If you want the best of both worlds, opt for a guaranteed capital fund so that you don’t loose your initial investment but still have the potential to make bigger returns.