By Anna Bowes

Anna Bowes, from Chase de Vere, spoke on Cashing In about what we can do to look after our cash more effectively.

An important part of financial planning is to build a good balance within your investment portfolio and one of the most important aspects is cash.

It is important for everyone to keep some cash available for emergencies and short term expenses that cannot come out of normal income, such as expensive holidays or school fees.

But by following a few simple tips, you can make this cash work as hard as possible for you.

• Shop around

  There is more and more competition these days among cash investments so it is worth looking around for the best deal. But look out for accounts that pay bonuses for a short period of time - once the bonus falls away, the account may no longer be competitive.

  Once you have found the best paying account, keep a regular eye on the rates as very often these high interest rates will fall once they have attracted a lot of business.

  There is even competition amongst current accounts these days. The majority of accounts pay about 0.1% gross - you may as well keep it under the mattress - but there are some accounts that will pay as much as the base rate.

  If you have access to the internet you are likely to get superior rates and it's easy to keep an eye on them.

  Anna Bowes stresses the importance of saving cash

• Use your tax allowances

  One way to increase the amount of interest that you receive on your savings is to reduce the amount of tax that is paid!

  Always remember that you can earn up to �4,615 income from any source before you have to pay tax. So if you are part of a couple, where one of you is a non taxpayer, invest any cash into the non taxpayers name, fill in a R85 form and receive the interest gross.

  If one of you is a higher rate taxpayer and the other is a basic rate taxpayer, again it makes more sense to invest in the lower taxpayers name, to reduce tax.

DON'T FORGET YOUR TAX EFFICIENT INVESTMENTS

• ISA

  If you haven't yet used your ISA allowance and you don't fancy investing it all into a stocks and shares ISA, then you could use your mini cash ISA allowance.

  You can invest up to �3,000 per tax year and receive interest tax free. If you use this every year, you'll soon build up a good lump sum of tax free savings.

  However you must remember the rules: You cannot take out a mini and a maxi ISA in the same tax year and, once you have invested �3,000, if you withdraw money from your ISA you cannot top it up again.

• TESSA only ISA

  Many people invested into Tax Exempt Special Savings Accounts (TESSAs) before they were replaced by ISAs in April 1999.

  However, the government did offer a lifeline to TESSA investors by providing an extra ISA allowance specifically for maturing TESSA capital.

  Once your TESSA matures, you have six months to re-invest the original capital investment (but not the interest) into a cash ISA or TESSA only ISA (TOISA).

  This is in addition to your normal ISA allowance but remember, if you do not transfer this money within six months, this valuable allowance will be lost forever.