The top six places to invest your money in 2010

We show you the best places to get a good return on your money this year...

Let's face it, 2009 wasn't the best year for savers. After all, we all had to watch in despair as the interest rates on our savings accounts rapidly deteriorated, leaving us to feel like the best option was to stuff our money under the mattress.

But what will 2010 bring? Will savings rates start to pick up again?

Unfortunately, I don't have the psychic powers to tell you that. But what I can tell you is six of the best places to invest your money this year.

1) Choose an ISA

Investing in an ISA is definitely a wise move. And that's because it's one of the few times in life that you won't have to pay tax.

Of course, you might be thinking that interest rates on cash ISAs are looking pretty pathetic right now - and true, they are certainly not as good as they were a year or so ago. But it's worth remembering that the more money you manage to invest in an ISA now, the greater the benefit you'll see when interest rates start to improve.  

You can invest up to £3,600 in a cash ISA each financial year, unless you're aged 50 or over by 5 April 2010, in which case the annual limit is even higher at £5,100. The rules, however, are changing in April - so download this free guide to make sure you're prepared. And if you're not sure which is the best cash ISA for you, take a look at The top 10 cash ISAs for 2010.

Alternatively, if you're after something a bit more adventurous, there's potential for a better rate of return if you invest some of your savings in a stocks and shares ISA. However, if you are going to do this, remember that your capital is at risk if share prices fall.

2) Get a fixed rate bond

If you don't mind tying up your money for a while, a fixed rate savings bond is a great way to earn some extra interest on your money. That's because the interest rates on fixed rate bonds are generally higher than those for easy access savings accounts.

Personally, I would only opt for a fixed rate bond lasting one or two years. Anything longer and you could find that the interest rate becomes uncompetitive later down the line if interest rates improve over the next few years - which, let's face it, is likely.

If you're looking for a one year bond, you could consider the 12 Month Fixed Account from Punjab National Bank which pays a market-leading rate of 4%. You'll need a minimum deposit of at least £1,000, and remember that you won't be able to make any withdrawals during the 12 months.

If you'd prefer a two year bond, ICICI's HiSave Two Year Fixed Rate Account offers an interest rate of 4.25%. Again, you'll need a minimum deposit of £1,000.

Alternatively, if you want a bond that will allow you access to your money in time for Christmas, check out Yorkshire Building Society's Christmas Saver account. It pays a decent fixed rate of 3.5%, and you only have to tie up your money until 1st December 2010. Just bear in mind that you can invest a maximum of £1,200 over the term.

You can compare a wide range of fixed rate bonds in our savings comparison centre.

3) Get a best buy easy access savings account

If the idea of tying up your funds for a year or more worries you, you might be happier opening an easy access savings account. Although the interest rates won't be as high as those you'd receive on a fixed rate bond, that doesn't mean they can't be competitive. And the great thing is, should you suddenly need to access your funds, you'll be able to.

The AA Internet Extra Account, for example, pays an interest rate of 3.15%, which includes a fixed bonus of 2.65% for the first year. You can open the account from as little as £1 and you won't be penalised if you need to make any withdrawals.

However, if you think you can be more disciplined about withdrawals, you can get an even higher rate of interest with the Coventry Building Society 1st Postal Account which pays an interest rate of 3.30%. This includes a fixed bonus of 1.30% for the first year. However, you can only make four withdrawals each year, and the minimum withdrawal amount is £1,000. It's also worth noting that this account can only be operated by post.

4) Get a better current account

Believe it or not, you can actually get a better rate of return with some current accounts than you can with a savings account.

The Alliance & Leicester Premier Current Account, for example, offers a fixed interest rate of 6% for one year on balances up to £2,500. Balances over £2,500 will only attract an interest rate of 0.1%, however. Just bear in mind you will need to pay in at least £500 a month into the account, and once the first year is up, the interest rate will fall to just 1%.

Alternatively, the Abbey Preferred In-Credit Rate also offers an interest rate of 6% for one year on balances up to £2,500. Again, balances over this will attract an interest rate of 0.1%. This time, you'll need to pay in at least £1,000 a month and again, once the first year is up, the rate will drop to 1%.

If you've got between £5,000 and £7,000 to invest, you could also consider the Lloyds Vantage Current Account. This account offers an interest rate of 4% - so it still beats many savings accounts! Just bear in mind that if you have under £5,000 in your account, the interest rate will drop. Anything between £3,000 and £4,999 will earn you 3%, and between £1,000 and £2,999 will earn you 2%. Anything under that and you'll only earn 0.1%.

5) Index-tracking funds

Another option to consider is an index-tracking fund. This is a cheap and easy way to invest in the stock market, without having to choose the shares yourself.

An index-tracker fund has a simple investment strategy which is designed to follow or 'track' a particular share index. For example, if you choose to invest your money in the FTSE 100 tracker, your money will be invested in all the top 100 UK companies quoted on the index.

Then, if the FTSE rises by a certain amount, the value of your fund will increase by a similar amount. Of course, if the index falls, so will the value of your fund. The aim is to match its performance as closely as possible. It doesn't require much effort from fund managers, so the management fees are very low. Of course, you won't beat the market - but you shouldn't do any worse than it, either.

If you are going to invest in an index-tracking fund, make sure you do your research first and consider diversifying your investments. You can invest in as many trackers as you like. If you'd like more information, read The ultra cheap way to invest in shares.

6) Get into Zopa

Zopa is an internet-based peer-to-peer lending business which allows lenders to achieve attractive returns on their money while borrowers can get their hands on cash at competitive rates.  

As a result, borrowers get better rates than on the high street, and lenders make a better return than they'd get from a traditional savings account.

You can lend from £10 to upwards of £25,000 and you can choose a term of either three years or five years. You can also choose the level of risk you're comfortable with - from A* rated borrowers to those with a less perfect credit record.

Borrowers are fully credit checked and risk-assessed and your money will be spread across different borrowers to manage the default risk.

So what kind of return can you get? Well, over the last 12 months, the average return earned by lenders was 8% - that's after fees but before bad debt. Can't be bad!

What's more, if you get in quick, you can earn 1% cashback on all new money that you add to your Zopa account and lend out to borrowers before 31 January. To qualify, you must lend out £1,000 or more.

If you'd like to find out more about Zopa, watch our video.

Finally, don't forget, if you need a bit of help getting into the savings habit, lovemoney.com can help. First, adopt this goal: Build up an emergency savings pot. Next, watch this video: How to save when you've got no money. And finally, why not have a wander over to Q&A and ask other lovemoney.com members for hints and tips about what worked best for them?

More: Five ways to save in 2010 | Beat the savings slump with these top accounts