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  • FIRST POST
    • Saga
    • By Saga 7th Sep 17, 12:12 PM
    • 22Posts
    • 1Thanks
    Saga
    Naive Question - 5-10% ?
    • #1
    • 7th Sep 17, 12:12 PM
    Naive Question - 5-10% ? 7th Sep 17 at 12:12 PM
    I've saved a small but relatively decent amount for a mortgage deposit, but am also toying with the idea of putting off buying for a further 12 months.

    Are there any safe saving opportunities that return between 5-10% which I can lock up most of my savings for 12 months?
    ---
    100% debt-free!
Page 1
    • SeduLOUs
    • By SeduLOUs 7th Sep 17, 12:17 PM
    • 2,073 Posts
    • 2,460 Thanks
    SeduLOUs
    • #2
    • 7th Sep 17, 12:17 PM
    • #2
    • 7th Sep 17, 12:17 PM
    You won't find 10% in short term savings, but there are quite a few 5% regular savers and some 3-5% current accounts that you can fill up if you are willing to make a few monthly transfers between them.

    http://www.moneysavingexpert.com/savings/savings-accounts-best-interest#currentaccount

    http://www.moneysavingexpert.com/savings/best-regular-savings-accounts
    • JohnRo
    • By JohnRo 7th Sep 17, 12:35 PM
    • 2,427 Posts
    • 2,179 Thanks
    JohnRo
    • #3
    • 7th Sep 17, 12:35 PM
    • #3
    • 7th Sep 17, 12:35 PM
    http://www.bankaccountsavings.co.uk/
    'We don't need to be smarter than the rest; we need to be more disciplined than the rest.' - WB
    • Zanderman
    • By Zanderman 7th Sep 17, 12:39 PM
    • 1,231 Posts
    • 3,621 Thanks
    Zanderman
    • #4
    • 7th Sep 17, 12:39 PM
    • #4
    • 7th Sep 17, 12:39 PM
    What SeduLOUs said.

    But... most are a lot less than 5%. Only, I thnk, Nationwide's FlexDirect will give a solid 5% on a lump sum and that's only on 2.5k. The other current accounts pay less than 5%, a few at 3% and a few at 2%. All only pay this on the first £1 to 3k or so. So you need to work at it to get the best return. Most have conditions to meet too.

    Many Reg Savers pay 5% (most of these have conditions too!) but that's the annual rate, and as they only allow small deposits per month you'll only get that 5% pro-rata on most of the deposits, so it won't be a full year of 5% on your total investment.

    10% is not on the agenda!
    • eskbanker
    • By eskbanker 7th Sep 17, 1:21 PM
    • 5,465 Posts
    • 5,270 Thanks
    eskbanker
    • #5
    • 7th Sep 17, 1:21 PM
    • #5
    • 7th Sep 17, 1:21 PM
    As you say on your other thread, you're a first-time buyer with a HTB ISA, but if you're not buying for more than a year you can get more money into a Lifetime ISA in order to earn 25% bonus on a larger amount (£4K/year). You can't get 25% on both a HTB and a LISA but can transfer the HTB into a LISA and pre-17/18 HTB money doesn't count towards the £4K annual LISA allowance, more details in that linked article.

    If your OH is also a first-time buyer you could double up between you....
    • Saga
    • By Saga 7th Sep 17, 1:24 PM
    • 22 Posts
    • 1 Thanks
    Saga
    • #6
    • 7th Sep 17, 1:24 PM
    • #6
    • 7th Sep 17, 1:24 PM
    OK. Thanks for the tips.
    ---
    100% debt-free!
    • Saga
    • By Saga 7th Sep 17, 1:26 PM
    • 22 Posts
    • 1 Thanks
    Saga
    • #7
    • 7th Sep 17, 1:26 PM
    • #7
    • 7th Sep 17, 1:26 PM
    I thought LISAs were only for 18-40yos? I'm mid-40s.
    ---
    100% debt-free!
    • tim_n
    • By tim_n 7th Sep 17, 1:29 PM
    • 1,567 Posts
    • 1,316 Thanks
    tim_n
    • #8
    • 7th Sep 17, 1:29 PM
    • #8
    • 7th Sep 17, 1:29 PM
    I wouldn't overlook what eskbanker says - it's a 25% bonus for no risk (each!) You won't find a better deal. If you've already filled that up, SeduLOUs's comment will help you maximise every last penny you can.
    Tim
    • eskbanker
    • By eskbanker 7th Sep 17, 1:30 PM
    • 5,465 Posts
    • 5,270 Thanks
    eskbanker
    • #9
    • 7th Sep 17, 1:30 PM
    • #9
    • 7th Sep 17, 1:30 PM
    I thought LISAs were only for 18-40yos? I'm mid-40s.
    Originally posted by Saga
    Ah, yes, you're right, sorry, I didn't pick up on your age!
    • barginfinder
    • By barginfinder 7th Sep 17, 11:26 PM
    • 325 Posts
    • 83 Thanks
    barginfinder
    be-careful of opening too many accounts at once (i.e high interest current accounts) as these can involve credit checks and could lead to a lower credit score which will impact your mortgage costs and choices
    I need a better signature
    • darkidoe
    • By darkidoe 8th Sep 17, 1:11 AM
    • 862 Posts
    • 974 Thanks
    darkidoe
    I've saved a small but relatively decent amount for a mortgage deposit, but am also toying with the idea of putting off buying for a further 12 months.

    Are there any safe saving opportunities that return between 5-10% which I can lock up most of my savings for 12 months?
    Originally posted by Saga
    Naive question indeed.

    Let us know if you find an answer.

    Save 12K in 2017 # 9 £7 616.65/15 000 (50.78%)
    Save 12K in 2016 # 8 £19 721.58/12 000 (164.35%) Achieved!
    • IanSt
    • By IanSt 8th Sep 17, 9:32 AM
    • 46 Posts
    • 21 Thanks
    IanSt
    I've saved a small but relatively decent amount for a mortgage deposit, but am also toying with the idea of putting off buying for a further 12 months.

    Are there any safe saving opportunities that return between 5-10% which I can lock up most of my savings for 12 months?
    Originally posted by Saga
    Others have talked about the impossibility of getting 5-10% safely, but have you considered what may happen to house prices over the next year and whether putting off buying is the best option for you. You've not mentioned your current housing circumstances, but if renting then there's that cost which is basically dead money and how would you feel if house prices suddenly shoots up - l'm not saying they will and so you should buy the first house you see, but why not keep looking and if you find the right one then consider whether it still makes sense to be putting off a purchase for the next x months.
    • Saga
    • By Saga 8th Sep 17, 11:43 AM
    • 22 Posts
    • 1 Thanks
    Saga
    Fair point. Thanks.
    ---
    100% debt-free!
    • Glen Clark
    • By Glen Clark 9th Sep 17, 8:20 AM
    • 3,825 Posts
    • 2,793 Thanks
    Glen Clark
    House prices are kept high by restricting the supply with the world's most onerous planning restrictions (whilst stoking up demand with 'Help to Buy' etc) . Even if supply restrictions were lifted (due to vested interests they won't be) it would take years for the builders to catch up with the demand. So don't wait around for a house price crash
    “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair
    • bigadaj
    • By bigadaj 9th Sep 17, 11:11 AM
    • 9,997 Posts
    • 6,393 Thanks
    bigadaj
    House prices are kept high by restricting the supply with the world's most onerous planning restrictions (whilst stoking up demand with 'Help to Buy' etc) . Even if supply restrictions were lifted (due to vested interests they won't be) it would take years for the builders to catch up with the demand. So don't wait around for a house price crash
    Originally posted by Glen Clark
    You're totally missing the issues around affordability.

    The market has been inflated as much by near zero interest rates as it has been by an excess of demand over supply.

    Government policy is now to restrict population icreases, on the back of Brexit they would arguably have more ability to do so, whether they succeed remains to be seen.

    If people can't afford the prices asked for, and with little wage inflation this is becoming more the case, then even with a lack of supply house prices will stagnate and potentially fall, if people don't have the money, or actually aren't able to borrow it.
    • JohnRo
    • By JohnRo 9th Sep 17, 1:32 PM
    • 2,427 Posts
    • 2,179 Thanks
    JohnRo
    That or forced into renting from those who can afford them. Which is what's now increasingly happening.
    'We don't need to be smarter than the rest; we need to be more disciplined than the rest.' - WB
    • Glen Clark
    • By Glen Clark 9th Sep 17, 1:58 PM
    • 3,825 Posts
    • 2,793 Thanks
    Glen Clark
    You're totally missing the issues around affordability.

    The market has been inflated as much by near zero interest rates as it has been by an excess of demand over supply.

    Government policy is now to restrict population icreases, on the back of Brexit they would arguably have more ability to do so, whether they succeed remains to be seen.

    If people can't afford the prices asked for, and with little wage inflation this is becoming more the case, then even with a lack of supply house prices will stagnate and potentially fall, if people don't have the money, or actually aren't able to borrow it.
    Originally posted by bigadaj
    No because low interest rates hasn't inflated the price of other goods - cars, TVs, clothes, etc where production isn't being restricted by UK Government.
    “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair
    • kidmugsy
    • By kidmugsy 9th Sep 17, 6:08 PM
    • 9,621 Posts
    • 6,370 Thanks
    kidmugsy
    if renting then there's that cost which is basically dead money
    Originally posted by IanSt
    "dead money" is a daft expression. Rent is also insurance against buying a house and then finding its value tumbling, it's insurance against finding the need for expensive repairs, it's insurance against suddenly needing to move house to pursue your career, or your lover, it's insurance against tying your capital up in a geared, illiquid, indivisible investment: it's many undead things.

    Buying a house to live in will often prove a fine long term investment but in the short term it can be ruinous.
    • bigadaj
    • By bigadaj 9th Sep 17, 6:56 PM
    • 9,997 Posts
    • 6,393 Thanks
    bigadaj
    No because low interest rates hasn't inflated the price of other goods - cars, TVs, clothes, etc where production isn't being restricted by UK Government.
    Originally posted by Glen Clark
    Right, so you're guaranteeing an everlasting and significant increase in house pricing even when affordability levels go from ten times earnings, to twenty times earnings etc etc
    • bigadaj
    • By bigadaj 9th Sep 17, 7:00 PM
    • 9,997 Posts
    • 6,393 Thanks
    bigadaj
    That or forced into renting from those who can afford them. Which is what's now increasingly happening.
    Originally posted by JohnRo
    The market has been significantly subsidised by housing benefit, which is now reducing in most cases.

    Yields are also dropping and will continue to do so, for the affordability reasons noted above, which means that in combination with taxation making btl less attractive, landlords are looking at selling.

    In common with most teas of finance you can manipulate things to maintain growth for a certain length of time, by zero interest rates, quantitative easing or other measures, but the pendulum will swing back at some point, the linger it takes the harder the return to mean.
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