Rating the rates

Choose a competitive provider

 You should regularly check the interest rate on your account and switch provider or savings account if the rate is no longer competitive. If you decide to move the money somewhere else, calculate the costs involved and the interest you would earn.
Some people switch providers frequently to capture only introductory rates. Remember that variable rates are subject to constant change. That is why you should aim for higher interest by choosing fixed rate accounts and switching them when you find better terms.
External Influences 
Be aware that inflation and taxes have an effect on the value of your savings over time. If inflation is 2.5 per cent, £1,000 deposited today would need to grow to £1,025 in one year to maintain your initial purchasing power. A rate of at least 3.2 per cent would be needed to account for the effects of inflation and taxes (if you normally get 20 per cent deducted from interest). For such a low principal, saving in an ISA would be a good alternative, given that interest is free of tax and interest rates average 4.5 per cent.