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  • FIRST POST
    • glang1
    • By glang1 6th Sep 16, 12:28 PM
    • 2Posts
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    glang1
    Savings Account or Cash ISA's
    • #1
    • 6th Sep 16, 12:28 PM
    Savings Account or Cash ISA's 6th Sep 16 at 12:28 PM
    Hi, I'm found myself in the fortunate position of being given 100k from the sale of my fathers property. I'm currently 25 years old and I will be looking to invest in flat in London in the next 1/2 years. I've had a look online regarding Cash ISA's and Saving Accounts.
    My understanding of an ISA is that it pays an interest rate on cash to the upper limit of around 15.5k each year. Whereas my understanding of a savings account is that it could pay interest on a balance up to 100k and therefore a higher amount. I currently bank with Santander and have the 123 Graduate Account.
    I am unsure on the best method in which to key this money to earn the best interest rate until I decide to use this to buy my own property. If anybody has any information they could provide I would be extremely grateful.


    Thanks,
Page 1
    • bigfreddiel
    • By bigfreddiel 6th Sep 16, 6:11 PM
    • 3,775 Posts
    • 1,718 Thanks
    bigfreddiel
    • #2
    • 6th Sep 16, 6:11 PM
    • #2
    • 6th Sep 16, 6:11 PM
    NS&I investment bond till you decide what to do for the £100k. At least you'll get 1%, or £1,000/year. It actually pays monthly so you will get about £83 /month into your account.

    Cheers fj
    • glang1
    • By glang1 7th Sep 16, 12:52 PM
    • 2 Posts
    • 0 Thanks
    glang1
    • #3
    • 7th Sep 16, 12:52 PM
    • #3
    • 7th Sep 16, 12:52 PM
    Thanks for your response. I've done some more research following your response. If I know im not going to use the money within a year. Would I be best to put 75k in a 1 year fixed rate. Charter Savings Bank have a fixed rate Bond at 1.46%. as the 75k would be covered per UK banking licence, is protected by the Financial Services Compensation Scheme (FSCS). I could then put the rest in an ISA and the remaining 15k in a current account?
    By putting 100k in the NS&I bonds would this be protected under the FSCS?
    Quite simply- am I best to spread my money as there is uncertainly with interest rates at the minute following the Bank of England announcement to reduce the rate?


    Thanks again,
    • eskbanker
    • By eskbanker 7th Sep 16, 1:32 PM
    • 3,413 Posts
    • 3,026 Thanks
    eskbanker
    • #4
    • 7th Sep 16, 1:32 PM
    • #4
    • 7th Sep 16, 1:32 PM
    By putting 100k in the NS&I bonds would this be protected under the FSCS?
    Quite simply- am I best to spread my money as there is uncertainly with interest rates at the minute following the Bank of England announcement to reduce the rate?
    Originally posted by glang1
    NS&I is directly backed by the Treasury (http://www.nsandi.com/why-save-with-us) so offers protection at least equivalent to FSCS but with a much higher limit, which is why they're usually recommended on here for those who have a large sum and don't want to fragment it across multiple accounts.

    Having said that, you'll still be best spreading the money around in order to maximise interest but there's no need to do so if your concern with NS&I was safety and security.
    • CJL
    • By CJL 22nd Sep 16, 10:46 PM
    • 10 Posts
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    CJL
    • #5
    • 22nd Sep 16, 10:46 PM
    Would not recommend Charter Savings
    • #5
    • 22nd Sep 16, 10:46 PM
    Personally, I would not recommend Charter Savings. They recently reduced the rate on a closed issue 120 day account, telling me by e-mail late in the day that it was happening that day. They gave no option to close the account because of the change of interest rate, nor did they give 120 days notice of the rate change. This is in contrast to other "challenger" banks such as Shawbrook, Aldermore, Paragon and Cambs & Counties, who all did one or other of these.

    Their customer services team was completely confused by what they had done, initially saying that the account could be closed without notice within thirty days of the notification of the rate change, but they then back-tracked on that. They said that the closure within thirty days of the notification was with 120 days notice. But, that can be done, as of right, even after the 30 days?
    • enthusiasticsaver
    • By enthusiasticsaver 23rd Sep 16, 5:47 PM
    • 2,146 Posts
    • 3,781 Thanks
    enthusiasticsaver
    • #6
    • 23rd Sep 16, 5:47 PM
    • #6
    • 23rd Sep 16, 5:47 PM
    We will be receiving a large lump sum in the next 6 weeks and will be putting it into National Savings income bonds purely because it protects more than £75k and is easily accessible.

    Very few cash isas offer good interest rates and stocks and shares isas are no good if you are going to need access to it within the next 5 years or so. You can stick £20k in your Santander 123 although the rate is going down to 1.5% on 1.11.16. Certainly if you are certain you are not going to need to access the money you can invest in a 1 year or 2 year bond but the rates for this are not brilliant either. I would stick with National Savings.
    Save £12k in 2016 #46 £13600/£12,000
    Debt and mortgage free and saving for early retirement
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