Interest rates are currently very competitive, and savvy individuals can take several steps to improve their financial position. Higher savings rates and lower interest rates on debts have created wonderful opportunities. By learning more about some of the strategies others have already adopted, you may be able to apply these strategies to improve your financial standing.
Refinance Your Debt
If you carry debts on credit cards, personal loans or even a home mortgage or a car, now may be a great time to refinance your debt. This is particularly true if you took out these loans more than a few years ago. Some who have refinanced high interest rate debt have been able to dramatically lower their monthly debt payments, and this has enabled them to free up money that can be used to pay the principal balance down more quickly or to allocate more of their funds toward savings and investments.
Choose the Right Savings Account
If you are like many others, you have had the same savings account for many years. However, interest rates on savings accounts can vary, and your current financial institution may no longer have the most attractive interest rates. A smart idea is to find banking institutions offering the best interest rates where you can transfer your existing savings account. Keep in mind that some banks have different rates if you have a higher minimum account balance. If you carry a lot of money in your savings account, look for savings accounts that are designed for high balances.
Diversify Your Investments
While bonds and savings accounts all have great rates currently, it is important to also diversify your holdings. These are only a few of the different investment vehicles. While they are known for being very safe financial options, there may also be other investment options that you can pursue with a higher yield and more risk. A well-diversified portfolio is one that balances risk and return properly.
Interest rates may currently be attractive, but they may not remain at this level. Rates fluctuate regularly due to market and economic conditions. Because of this, now is a great time to lock in a great rate on short-term and long-term debt as well as on your savings accounts. By taking these steps now, you may see a great improvement to your financial situation.