Solar water heating savings are better than the interest on savings accounts

Are you better off investing in solar water heating than putting money into a savings accounts? You sure are!

Unless you are  willing to invest in a high risk bond in a far off land and potentially lose all your money (all though option is no longer available due to the collapse in the Icelandic banks and the credit crunch) you will have to choose a UK based bank or building society (which have not been so financially secure recently due to the credit crunch).

The current domestic savings products are earning about 4.5 percent gross interest on a bond and after a tax of twenty percent or forty percent for a higher income rate earner this will amount to a net interest rate of 3.6 percent for the lower tax band and 2.7 percent for the higher tax band.

When you consider that this would mean that you would only earn  £108  or £81 for the higher tax band on  an investment of £3000 isn’t it worth considering another option.  For £3000 you can install solar water heating that can add top the value of your property and saving up to 25 percent of your overall heating bill which would prove attractive if you use gas central heating and even more attractive if you are using the more expensive fuels such as oil and electric boilers.

Furthermore the Bank of England are going to meet in early   January of 2009 and are expected to cut base rate by another 0.5 to 1.0 percent which would mean that savings rate may fall to 4 or 3.5 percent on a bond which would mean at worst that you would only earn  2.8 percent net or 2.1 percent net on a higher income band which equates to £84 interest for a lower band income earner and £63 for a higher income band earner now the fuel bill savings associated with solar water heating must be an even more attractive proposition compared to the savings rates earned with your bank or building society.

In addition to this we must also consider the benefits that solar water heating can bring with regards to the recent events happening between Russia and the Ukraine and its effect on the security of gas supplies to the UK.  Due you want to secure your hot water heating supplies and no longer be held to ransom by Russia!

This entry was posted on Tuesday, January 13th, 2009 at 3:31 pm and is filed under Green Energy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.