Maximizing Savings: Laddering involves setting up fixed-rate accounts over one to five-year terms, reports Madeleine Ross Savings rates are the highest they have been for years, with some fixed-rate accounts now offering well over 6pc interest. While some savers will be more than happy to lock away their full sum of savings for a year or two in whichever account pays the most, anyone who is worried they might need to access some cash during that time, or who is nervous about missing better rates in future, might be hesitant to press the “save” button.

read: Start-up Woe: What to Do When Employees Can’t Scale

However, one tactic that sees savers make the most of high interest rates while also investing in longerterm fixes could offer some muchneeded stability.

The “laddering” technique involves a saver splitting their lump sum across a variety of accounts on a number of different fixes, where one fix matures every year. Once that account matures, you could spend some of it, or put it straight into another fix. Usually, the highest rates on the market are offered by long- term fixes ( commonly five years), so the eventual aim is to have a rotation of five five-year fixes, with one maturing every year.

Read : The evolution of the entrepreneur

Sarah Coles, at investment website Hargreaves Lansdown, said: “Laddering is a great way to maximise interest, while ensuring you have access to a lump sum each year. At the moment it’s less effective at boosting interest, because the inverted yield curve means you’ll earn less over five years than you do over one. However, if you fixed it all for a year, you could end up facing a far less rewarding rate when you emerged, so laddering mitigates this risk.”

While it may not beat inflation, this savings technique allows savers to make the most of some of the best rates available right now, and the certainty of longer-term accounts.

Read : Start-up Woe: What to Do When Employees Can’t Scale

This could prove to be particularly important, as inflation looks to have peaked and be on its way down. Further Bank Rate rises are still forecast, but analysts expect this to peak below 6pc in March 2024; before the latest inflation figures, it was expected to reach 6.25pc.

Currently, no savings accounts offer inflation-busting rates, according to analysts at Moneyfacts, with the best twoyear fixed account rate on offer on Wednesday at just 6.24pc with Investec, through savings website Raisin UK.

By opening a one-year fix, a two-year fix, a three-year fix, a four-year fix and a five-year fix, savers can ensure that they have both liquidity and strong interest payments.

Daily Telegraph analysis with Hargreaves Lansdown found that, at current rates, savers could earn £1,724 in interest payments on five £1,000 pots over a fiveyear period – and this is before reinvesting opportunities are fully considered.

Investing £1,000 pots at a rate of 6.1pc for the one-year fix and 6.15pc for a two-year fix would yield interest payments of £308 in the first year and £303 in the second.

With a three-year fix at 6.1pc, a 5.85pc for four and a 5.8pc over five, and assuming that when accounts mature savers reinvest into a five-year fix at 4pc, in the third, fourth and fifth years consumers could rely on interest earnings of £294, £284, and £273. If a saver can increase the pots to £5,000, they can earn up to £7,342 in interest payments over the five-year time frame. In the first year, the five pots will earn £1,540, falling slightly to £1,519 in the second year and £1,479 in the third. By year four, interest payments will total £1,431 and in the fifth year the earnings will be £1,373.

Read : 7 Steps May Bring Out Your Entrepreneurial Diva

Rachel Springall, at Moneyfacts, said savers should move quickly to secure high short-term fixes, some of which are now more than 6pc.

It’s not necessary to put the same amount of money in each pot, and when accounts mature you can also choose whether to reinvest in short or longterm fixes, depending on your personal preference, and what’s happening with interest rates at the time.

If a saver continues to open five-year fixes, eventually they will be in a position where they have a long-term account maturing every year.

James Blower, at Savings Guru, said savings rates could be near a peak, although shorter-term loans are likely to remain lucrative over the next couple of years. “Spreading across terms enables savers to lock in to good rates now, particularly longer term ones which look overpriced (to savers) but retain access to some shorter-term fixed-rate monies where they may have a chance to fix at good rates in one and two years’ time.”