Do you have a piggy bank?

Six months ago we started a piggy bank (actually a large Evian bottle with a slot carved into it) to see how much our loose change would add up to. To our surprise, we managed to accumulate over £75 simply by putting all our left over 1p, 2p, 5p, 10p and 20p coins into the piggy bank.

Even better though was our discovery of our local Coinstar machine at Sainsburys. Instead of spending hours counting and individually bagging your change, you simply tip your piggy bank into the Coinstar machine and it counts it for you. They charge a fee of 7.9%, which is high, but arguably worthwhile if you don't have the time to sit around counting...

So start that piggy bank today and see how much you can save. Coinstair reckon that there is over £400m of loose change floating around in British homes today!

Why you should start investing NOW

The Motley Fool (http://www.fool.co.uk/) is one of our favourite financial web sites and today our tip is simple - go and read the article entitled 'The Miracle of Compound Returns'.

Not only are the calculators extremely useful - one showing you have much you'll end up with if you save a certain amount per month, the other showing you how much to save if you have a specific goal in mind - but the discussion of compound returns is illuminating.

The temptation to spend all our disposable income when we are young is palpable, but just by putting away a small amount each month, every month from the day we start working, we can end up with quite a formidable sum.

Suppose you start work at the age of 25 and set aside £50 a month for 30 years into a FTSE 100 Index Tracking ISA which returns 12% a year (the average return of the stock market). You'd end up with £184,009. If you increased your monthly contribution as your salary rose (which you should do!), you could end up with double or even triple this amount.

Our top tips:

1. Start investing as early as possible
2. Just £50 a month invested over a long period can end up producing a very large sum of money - don't be put off investing because you think £50 a month isn't worth it...it is...
3. Finding £50 is easier than you think - cut £25 from your weekly budget (cigarettes, alchohol, cutting bills, eating in, etc.) and add £25 to your income (Quidco, Ciao, ebay, etc.)
4. However, don't overstretch yourself - any stock market linked investments need to run over a minimum of 5-10 years to smooth out any ups and downs in the market and selling before this time is up could result in losing some of the money invested

Thinking about buying a house or flat?

The housing market is currently full of uncertainty...

Will interest rates rise or fall?
Will buy to let tax relief be abolished?
How many homes will Gordon Brown actually build and will it make a difference?

In such a climate, making sure that you drive a hard bargain is crucial. Our view at the 60 second daily money tip is that buying a house or flat (at the right price) is the best investment you will ever make. But before you rush off to the estate agents' office, remember that we said 'at the right price'. When the market is perceived to be high, you need to make sure that:

1. you are buying for the long-term
2. you can afford the monthly repayments even with several interest rate rises
3. you stick to the mantra of 'location, location, location' or find an area that is genuinely up and coming (look for: new builds, scaffolding on existing properties, more young people)
4. you love the property (this is not something most financial web sites would say, but if prices go down and you love your home, you are going to be happier staying put than if you bought a boxy, characterless flat in desperation to get on the property ladder)

Here is a great web site to work out whether it is more cost effective to rent or buy:

Mortgage v. Rent calculator

And another fantastic web site which shows which properties are being reduced around the country (a good way to find a bargain):

Property Snake

Although the current market isn't great for home owners looking to sell, it is a real advantage to buyers. Not only is there potential for a plateauing in prices (or even a slight fall) (we do not believe there will be a crash, at least in the South East where we are based), but the market has slowed and given much needed breathing space for home hunters. Take advantage of it.

Fantastic fixed-rate savings deals

On Friday we looked at the best instant access savings accounts; today we are looking at the best fixed-rate deals if you can afford to lock your money away for a year or longer.

The reason for the sudden surge in very competitive deals is interesting (or at least we think so!).

As you are probably aware, we are in the middle of a so-called 'credit crunch'. Basically, the banks (and other third party lenders) have lent too much money to people who are struggling to re-pay it and now need some more to continue their traditionally profitable business of lending. In order to get this money into the system, banks need to lure savers with good offers, hence the emergence of highly competitive fixed-rate savings deals over the past few weeks.

Leading the pack is Derbyshire Building Society with a one year fixed rate of 6.85%. Other places to look include: West Bromwich Building Society, Northern Rock, Heritable Bank and Icesave. Whilst there is not a huge difference between the rate offered with these fixed rate deals, bear in mind that some economists are predicting that interest rates could fall quite rapidly in 2008 to help buoy up the economy. Perhaps now is a good time to lock away some cash?

If you don't yet have any cash to lock away, take a look at our growing guide to making money online.

Make a little extra money online

The internet is full of scams and bogus offers to make you rich. However, if you dig a little deeper, you will find that there are a number of companies which offer a genuine opportunity to make a little extra money on the side with a little extra work.

If you're a regular reader, you'll already know that we love Quidco, a web site that allows you to earn cashback with thousands of popular companies, and that we think Agloco is worth signing up to on the basis that there is no risk and you may get paid a few dollars a month just for having an unobtrusive little bar at the bottom of the screen.

Now we're adding Ciao to this list of reputable money making web sites. As always, we test sites thoroughly before recommending them to our readers and we've had an account at Ciao for some 6 months now during which time we've earned over £15. All you have to do is sign-up to receive surveys and then answer them - each survey pays from a few pence up to over £1.

As with investing, where broad exposure to different companies/asset classes is best, we believe signing up to multiple, high-quality money making web sites is the best way to maximise your online income. The added benefit with Ciao is that you get to influence the behaviour of big companies too.

Click the banner below to sign-up with Ciao:

Is your savings account a good one?

Yesterday we discussed moving current accounts to get a high rate of credit interest on your money. Since most of these high paying current accounts have a maximum balance on which the competitive interest rate will be paid (except for Coventry Building Society with their Coventry First account), you need to find a home for any money left which exceeds this limit.

As is the case with most financial products, the market has become increasingly competitive over the past few years. ING started the war with its instant access savings account (now totally uncompetitive) and others have followed.

The three leading companies for hassle free, instant access savings are Icesave (run by the Landsbanki, an Icelandic company), Sainsbury's Bank and ICICI (run by ICICI Bank of India). Icesave currently pays 6.2%, Sainsbury's Bank 6.25% and ICICI 6.3%.

If we were selecting a new account, we'd rule out ICICI immediately as they are not a signatory to the Banking Code, meaning that you do not get the full protection afforded by UK banking regulations. There is not much between Sainsbury's and Icesave, although we do have an Icesave account and have been very impressed by the simple web site and responsive customer service.

Setting up a new savings account is so easy and can be done online within about 5-10 minutes. If you don't fancy the hassle of switching your current account (which really isn't that much hassle nowadays) get yourself a high paying savings account and make sure you put most of your money in there where it will work harder for you.

If you've already used your ISA allowance for the year, using a high interest savings account as your emergency fund is the next best option.

Would you be better off with a new current account?

Most current accounts pay a pitiful rate of credit interest, but renewed competition between banks and building societies means that there are some excellent deals available if you are prepared to switch.

Leading the pack is Alliance & Leicester with current accounts that pay 10% credit interest if you are between the ages of 16 and 21 and 6.50% for everybody else. However, if you're not in the 16 to 21 age bracket, you'll be better off with Abbey who are paying 8%. Other places to look include Lloyds TSB with their 6.4% Current Plus account and Coventry Building Society with their Coventry First account (this account paying the interest rates on balances up to £250,000 rather than the usual £2,500 limit).

Switching accounts takes time, but once you've filled out a couple of forms, your new bank should take care of all the arrangements, including switching your all important direct debits and standing orders to make sure you don't miss any payments.

Before switching make sure that:

1. You will be able to pay in the minimum required amount each month to benefit from the high interest rates
2. You will not be using an overdraft and, if you plan to, make sure that the interest rate on this is competitive (some of these accounts rely on people going overdrawn and then stinging them with high debit interest rates)
3. You have a separate high-interest savings account to put any extra money in - any amount over the maximum will receive a very low and uncompetitive rate of interest

By switching from a bank account paying just 0.1% interest to Abbey's 8% rate, you could make an extra £200 a year before tax.