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Investing money wisely may beat your bank savings account interest rates

Investing money wisely becomes more important if you are hoping to see a sensible return on savings or investments. You will most likely want to invest for the long-term to even out the peaks and troughs of fluctuating markets around the world. If you are quite happy with a low-risk investment strategy, you may just invest your money in a savings account and earn about 3% per annum. However, there are a few other options that you may want to consider.

How about investing in property?  Although housing markets are at an all-time low, they will pick up again. If you choose to purchase property and rent it out, you will earn from your capital investment when house prices rise and also receive a rent from your tenant. You do not necessarily have to purchase property in the UK, there are many upcoming markets in Europe and further afield.

There are lots of people who are looking for credit. You can use sites like Zopa.com to lend others money in a safe way. You lend money across a range of borrowers to minimise any losses. You can set your rate and choose whether to lend your money for three to five years. The average return on money lent, after fees and taking account of bad debt, averaged 6.8% last year.

For longer-term investments, you may want to consider corporate bonds. You can now trade bonds online on the London Stock Exchange without the assistance of a fund manager. You can choose up to 50 different bonds, including Government bonds. You will need to trade in batches of £100 or £1,000, free from 0.5% stamp duty applied to share purchases and can be bought as part of your tax-free Individual Savings Account or ISA. Bonds are less volatile than shares, but they are not without risk as they are not guaranteed, so choose well-known retail companies that are good credit risks.

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