Christmas and New Year is a popular time for loved-up couples to pop the question and commit to a lifetime together.
But, as this romantic season comes to an end, January quickly becomes the month for newly engaged couples to start thinking about their upcoming nuptials.
Planning a wedding is an exciting time, but it can also come with some financial challenges.
According to Hitched.co.uk, the average cost of a wedding in 2022 was £18,400, which was a 6% increase from the previous year. Plus, of the 2,400 couples they surveyed, 59% used savings to fund their money.
So, with the cost of weddings rising each year, and more couples choosing to use their savings, there’s never been a more important time to get your money in order.
The good news is that savings accounts are still offering competitive interest rates, so the higher-interest could help to pay for your wedding by maximising your savings.
First, let’s look at fixed-rate savings accounts.
For couples that might already have a lump sum in savings, fixed-rate accounts can be a great place to make the most of this money.
For example, Investec has a one-year fixed-rate saver with an interest rate of 5.15%.
This savings account requires a deposit of at least £5,000 and it means you won’t be able to touch the money until January 2025. However, weddings normally require a deposit and then a payment closer to the wedding day. So, if you plan your budget carefully, you should know exactly when you need to pay for the venue or even the honeymoon. If it’s after January 2025, then a one-year fixed-rate savings account could work well.
See the top-paying instant access, notice and fixed rate savings accounts on the market today
If you deposit the £5,000 you’ll earn around £258 in interest when the term ends next year - that money could be used to pay for the bridal party hair and makeup!
However, if you don’t currently have a lump sum to save, then there are still savings accounts that can help.
A regular savings account supports savers that wish to save little and often.
If you’ve created a wedding budget and you can save around £300 a month, then it might be worth adding this to a regular saver.
It’s worth noting that the top regular savings accounts in the market are currently for existing customers. This means if you want to maximise the interest on your savings, you might need to switch current accounts.
Take First Direct’s regular saver account. This can be unlocked if you have a First Direct current account or decide to switch. If you do switch, then you could get £175* cashback when you open an account and deposit £1,000. This offer is only available to new First Direct customers, but the extra cash could also help your wedding fund.
New bank account deals are offered all the time, so compare bank accounts and see if there is an account that works for you.
As we mentioned, switching current accounts will then unlock its regular saver which offers a high interest rate of 7%. This rate is fixed for 12 months and you can save between £25 and £300 a month. The deposits are also flexible, so you can change the amount of your standing order each month.
The 7% interest means that if you were to save £300 every month for 12 months, your savings pot would be £3,600 and you would get approximately £136.50 added in interest.
All of these bonuses will start to add up and will be invaluable for your wedding fund.
If you can, it’s a good idea to have a fixed-rate and a regular savings account to manage your money. And there’s a third type of savings account that can help with your wedding planning.
An instant or easy access savings account works well for money that you might need immediately - like the aforementioned deposits. There’s no point leaving money sitting in a current account earning little to no interest, so if you can, move it to a high interest easy access account.
Cahoot has a simple saver with a variable interest rate of 5.12% for one year. This account can be opened with just £1 and it’s flexible as you can withdraw money whenever you wish. This means it acts just like a current account, but with the added bonus of some interest.
If you opened the Cahoot saver with £1,000 and made sure to keep this amount in the account for the next year, you would approximately earn an extra £50 (if the variable interest rate remained at 5.12%). This £50 could be used for some flowers to spoil the mother of the bride.
So, by managing your wedding budget effectively, switching current accounts and opening the right savings account, you could earn more than £600 in interest in one year.
Of course, this interest will vary depending on the money you currently have or plan to save, but with some savvy saving your dream wedding can be a reality.
*Ts and Cs apply
