Six money must-haves for summer

Find out which leading financial products are the pick of the bunch today.

This article was first sent to readers as a '360 degrees' email.

'Six Money Must-Haves For 2009' was one of our most popular articles last year. Our team of experts rounded up their favourite financial products which we thought could boost your wealth this year.

Five months on, I thought it was time to see if those products are still the best of the bunch.

Cashback with your credit card

Donna Werbner kicked off December's article recommending the American Express Platinum Cashback card.

Donna loves getting cash back when she spends, and this Amex credit card is still the cashback market leader. You get 5% cashback on the purchases you make in your first three months (up to a maximum of £2000) and, after that, you could get up to 1.5% cashback if you're a big spender.

To be precise, if you spend less than £3500 in a year, you get 0.5% back; between £3500 and £10,000, you get 1%; and if you go over the £10,000 mark, you'll get 1.5%.

I think the Amex card is still the market leader - especially if you can afford to spend at least £10,000 on the card and get the 1.5% rate. So no change on this recommendation.

A top saver

Our top savings pick in December was Anglo Irish Bank's Easy Access Deposit Issue 2. Back then Anglo Irish was paying a chunky 4.55% rate and Szu Ping Chan was also attracted by the bank's same-day withdrawal scheme.

However Anglo Irish's replacement easy access account is now only paying 1.85%, and you can get better returns elsewhere.

These days, the ING Direct savings account  tops the tables and pay 2.75% on deposits as small as £1. In a low inflation world, I think this is a pretty decent return.

When shares are cheap

If you're looking for higher returns than 2.75%, the stock market may be the answer. Share prices are at historically low levels and I think there is a good chance that shares will perform well over the next five years. Of course, I could be wrong, and shares are a far riskier home for your cash than a savings account.

Still, if you're tempted to invest in the stock market, index trackers are the simplest option.

In December Maynard Paton said his favourite tracker was the Legal & General UK Index Trust.

It's a popular fund but I prefer the Fidelity Moneybuilder UK Index fund because it's cheaper. Fidelity's fund has a Total Expense Ratio (TER) of 0.27% whereas L&G's TER is 0.52%.

5% on your current account!

Another way to boost the return on your savings is to open a current account. If you go for the Alliance & Leicester Premier Direct Current Account, you'll receive 5% interest on your balance up to £2500. That's a much better rate than most savings accounts

You'll need to pay in at least £500 a month to benefit from this introductory deal which lasts for a year after you open the account. Also please note the 5% rate is variable.

I recommended this account last December and I still think it's the best current account out there.

Mortgage for the long-term

When interest rates are at an historic low, there's a strong case for choosing a long-term fixed-rate mortgage. You can then lock in a low rate for the long term.

In December's article, Tim Wilson recommended a five-year fixed rate deal from Lloyds TSB. I'm going to go one better than that and highlight a ten-year mortgage.

My favourite is Britannia Building Society's 10-year fixed rate deal where the rate is just 4.89% for borrowers who can put up a minimum deposit of 40%. If I was choosing a mortgage right now, this is the one I'd go for.

That said, long-term fixed deals aren't for everyone. If you need to switch your mortgage before the ten years is up, you'll have to pay early repayment charges which can be pricey.  The other issue is that interest rates might stay at or near their current level for most of the next ten years. If that happened, 4.89% would prove to be a rather expensive rate in the end.

If you're unsure about what to do, speak to a mortgage broker who can give you advice based on your own financial circumstances.

The best balance transfer card

Laura Starkey picked the Virgin Credit Card last December. It's still a great card if you want to transfer debt from another card. You won't have to pay any interest on your debt for 16 months (subject to a 2.98% fee), and you can also benefit from a range of special offers at other Virgin companies and others including Sainsbury's.

But on the downside, you'll pay 16.6% interest when the 0% period ends and you probably won't be able to get this card if you already have another credit card operated by MBNA. I also know that some users have been disappointed by the customer service for this card.

That said, the Virgin card is a great way to cut your interest bill.

Get set for summer!

Hopefully, at least one of these products will be appropriate for you. Have a great summer!

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