questions from a new saver...

crazydad

hi all

i am in the awful position at the moment of not having any savings at all. but, soon i will have some money to save/invest so i have a few questions i would like to ask. first is about the £35k protection you have from the government. if i were to put £35k into kaupthing edge savings account and another £35k into their term account, are both sets of monies protected? secondly, why does KE savings account come top when it's gross % is 6.36 but B & Bs gross is 6.51%?

please don't shout at me if the answers are obvious, like i say i am new to this saving lark :think:

tia

kingmonkey

You are protected up to £35k per institution (not per account).

The difference in rates is due to interest being paid monthly or yearly. It is best to use AER when comparing saving accounts. Martin's article is good at explaining.
http://www.moneysavingexpert.com/banking/interest-rates#save

crazydad

thanks kingmonkey :beer:

MrBeans

Hi,

Don't know your situation, but if the money is for long term savings and you are a tax payer, consider putting some into a cash ISA each year. There's no income tax to pay on the interest in an ISA. You can put £3,600 a year into a cash ISA.

Look on the ISA as part of the long term savings. You may find a one year fixed term ISA offering higher rates than instant access ISAs.

LongTermLurker

When looking at the £35k limit, leave room for the interest as well, so that's protected.