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Where to put your pile

Savers usually have a hard time of it, but you can now place large sums of cash into one account - on 31 December the Savings Deposit Guarantee in Britain was raised from £50,000 to £85,000.

So you can put your pile in a savings account and, as long as it’s £85,000 or less, rest easy in the knowledge that you’ll get it back - even if the bank goes bust. But what about the interest you’ll receive on your savings?

The Consumer Price Index (CPI) is currently 3.7%, but the Bank of England base interest rate just 0.5%. Take this and tax into consideration and most savings account won’t give you much of a return. The best interest rate in the market is Coventry Building Society's five-year fixed-rate bond, which pays 4.75%.

In an Isa, you can shield £5,100 from tax every year, bringing the break-even interest rate down. Northern Rock's Fixed Rate Isa Issue 151, which pays 3.5% , could be a good bet for this, if you are prepared to stash your cash with them for three years.

The risk with locking your money away like this is that both inflation and interest rates could rise, which would leave you with a sub-standard rate. The penalties to get out of these deals are hefty – 120 days and six months’ interest respectively.

An instant access account would make for an easier life. The best instant access Isa interest rate is Santander's Flexible Isa with a rate of 2.85%. While the best non-Isa rate comes from the Post Office's Online Saver, at 2.90% for the first year.

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