Viewing 14 posts - 1 through 14 (of 14 total)
  • Decent savings accounts – Teach somebody rubbish with money to be sensible!
  • handyman153
    Free Member

    Evening STW.

    My partner and I are now in a situation where we can afford to put some money into to one side. Possibly for a house deposit at some point.

    We don’t think we will need to touch this cash anytime soon, meaning it can be hidden away somewhere.

    After the normal googling and research, I think I have 2 options at the top of my list –

    1 – Find a decent Fixed Rate Bond account, 2.07% seems to be the best I can find at the moment. This is with ‘Oak North Bank’, I’ve never heard of them, but is that a bad thing?

    2 – I have been reading about peer-peer loans, which sound interesting.
    Some websites claiming up to 12% return p.a
    But this is raising alarm bells, is it risky? Do any of you do it?

    Or should I be looking at something else?

    Forgive the fact I am a novice at this.. I’ve never really been in a position to save money before, and want to try and do it correctly, and in the best way possible.

    Thanks all.
    J

    garage-dweller
    Full Member

    What you have to remember with any kind of investment/savings return is you don’t get something for nothing.

    Higher (potential return) = higher risk and potentially risk to the underlying capital and not just the interest.

    If you want better than savings rate returns then you want to get some proper (FCA regulated) advice especially if you are not a “sophisticated” saver.

    Trimix
    Free Member

    Dont bother saving if you still have loans / mortgage.

    Dont use a peer to peer investment.

    A pension is tax efficient, other than that what are you saving for.

    If your saving to buy something just buy it with a zero % credit card.

    Inflation is 2+%.

    Fresh Goods Friday 696: The Middling Edition

    Fresh Goods Friday 696: The Middlin...
    Latest Singletrack Videos
    slackboy
    Full Member

    have a look here for best saving rates.

    http://www.moneysavingexpert.com/banking/

    Do you have a lump sum to save, or are you thinking about putting away an amount each month? if each month then several banks offer up to 5% interest on a regular saver account (usually limit of £200-300 per month to save) http://www.moneysavingexpert.com/savings/best-regular-savings-accounts

    National Savings (NS&I/UK Government) have a 3 year bond that guarantees 2.2% return – isn’t much but it is risk free. you won’t get your money out for three years though.

    I’d steer away from any sort of “investment” – shares, peer to peer lending etc all have a degree of risk. Stick with standard savings accounts to begin with.

    irc
    Full Member

    If it is for a mortgage deposit a help to buy ISA seems worthwhile for a lump sum of £1200 then £200 per month.

    if you’re a first-time buyer, putting your cash in a Help to Buy ISA (or a new Lifetime ISA) before thinking about any other savings is a no-brainer.

    So at the point you use the ISA to buy your first home, all the money you have put in and the interest will have 25% added to it, with two exceptions:

    You need to have at least £1,600 saved to get the bonus (so you’d get £400 extra).
    The most you’ll get the bonus on is £12,000 (so a £3,000 bonus). If you have more than that you can still use the ISA to save, you just won’t get more than £3,000 on top.

    http://www.moneysavingexpert.com/savings/help-to-buy-ISA

    n0b0dy0ftheg0at
    Free Member

    Help To Buy ISA for both of you, if you are able to save over £200 per month between you, as above no-brainer.

    gauss1777
    Free Member

    Whilst you should attempt to get a reasonable interest rate on your savings, interest rates are poor and the best way to save IMO is being able to resist spending, especially once you’ve managed to accrue some savings. The rest of my immediate family are terrible at saving, as soon as they have put some money aside, off they go and buy something new, often to replace something they already have.

    “If your saving to buy something just buy it with a zero % credit card.”
    This may be good advice, but personally I would rather save the money first, by the time I’ve then saved the money, I often find I don’t want or need the item.

    handyman153
    Free Member

    Thanks for the replies, I spent last night and this morning reading about the regular savings accounts, and now the Help To Buy ISA’s.

    We are being pretty strict with ourselves regarding spending, especially on frivolous things. So i think we have that side of things sorted.

    Slackboy – The accounts you have linked seem good, as we don’t really want to enter into any risk.
    After reading about the peer-peer lending, you as the lender seem to hold a lot of the risk yourself, which doesn’t sound appealing at all.

    The Help To Buy ISA sounds great, but my concerns are as follows –
    We aren’t 100% set on buying here in the UK, as my other half is Polish. So for the price of a decent deposit on a house in the UK, we can buy a house cash back in her home town. And moving over there is something I am definitely open too.
    My worry is that we throw all our money into a ‘HTB ISA’, then at the end of the saving period, make a decision that doesn’t get any of the benefits!

    Thanks for the help though, its a minefield of different options!

    J

    badnewz
    Free Member

    I’d just bank it in your normal account. Interest rates are so low that unless you are sitting on some major savings, the interest you will accrue isn’t worth all the hassle on going down the savings account/ISA route, and the restrictions that come with them.
    DO NOT get involved in peer to peer lending, especially things like Funding Circle which look very dodgy to me. And avoid anything associated with HTB.

    The Polish connection is interesting and having visited a few times, I think I’d be tempted to move out there if my OH was from there, all work-dependent of course! The build quality of the property is superior to the UK and also prices are fairly reasonable, unlike here.

    munkster
    Free Member

    DO NOT get involved in peer to peer lending, especially things like Funding Circle which look very dodgy to me.

    Interesting. YMMV but I’ve obviously been “lucky” then. Agree that FC does feel more precarious.

    trail_rat
    Free Member

    zopa and ratesetter have been working well for me for a good while – but they are not the first place i would look to save money.

    didnt like the look of funding circle or lending stream though – and they one that has given its self a posh name to sound like a bank . welsley or something ?

    MEanwhile while i agree that a pension is tax efficient – i am sceptical of them not being raided in my lifetime to fund political decisions ….so i have a company pension , i pay in enough to get the max company matched contribution(which is where most of my growth in pension seems to come from it seems looking at their figureS) and i make my own investments else where – i also can lay my hands on it when needed which i guess is both a plus side and a negative depending on your outlook. But im not commiting all my savings to a pension.

    Im unlikely to go for a LISA either as i have already bought a home so it will be 30+ years before i can get access to it .

    my general attitude towards savings is put together a 3 months of expenses easy access buffer fund – this will likely be held in something low interest or in my case premium bonds -which over the last 5 or so years have been flourishing for me with the occasional big win and almost at least one 25 quid every month sometimes more but the first 2 years i hardly got a thing.

    Then i have a S&S ISA where i put more long term savings mostly into funds(which are outstripping that of my companies pension quite significantly – even in their ageband riskier investments portfolio) although i hold 1 or 2 single shares from time to time.

    then i have zopa and ratesetter which is a small % holding more of an experiment to see how they go as you read about all these bad loans and them being like junkier junk bonds – but as it goes im doing ok over about 18 months.

    i guess the major downside to my approach is i have to spend my savings before i can apply for job seekers – unlike if it was in a pension.

    suburbanreuben
    Free Member

    Check out the “high” interest current accounts on offer from the likes of Tesco, Nationwide, Lloyds, TSB, Santander , etc.

    Tesco offer 3% interest, I think, on up to three thousand, and Santander offer 1.5% up to £20k.
    The details for each are different but most allow you toi have an account each + a joint account .

    n0b0dy0ftheg0at
    Free Member

    Even if you don’t end up buying a house in the UK, the interest rates were very decent on Help To Buy ISAs, I opened my Halifax one in Feb ’16 and got 4.0% for most of that first year.

    What I can’t recall off the top of my head is if there is any penalty for simply closing the HTB ISA account without buying a home.

    suburbanreuben
    Free Member

    What I can’t recall off the top of my head is if there is any penalty for simply closing the HTB ISA account without buying a home.

    Oh Yes!. Quite onerous penalties that may leave you mistrusting any further saving/investment schemes…

Viewing 14 posts - 1 through 14 (of 14 total)

The topic ‘Decent savings accounts – Teach somebody rubbish with money to be sensible!’ is closed to new replies.