Want 'complete solution' for £15000 savings

icebergx

Hi all,

I was hoping someone could help me.
I've got a bout £15000 to save and I wanted a 'complete solution' of what to do with this money.
I was thinking of:

1) ISA (I was thinking of the Bradford & Bingley eSavings ISA)
2) A Regular Savings Account (I was thinking of the ICICI HiSAVE Savings Account)
3) A current Account (don't know which one)

I was thinking of having my salary fed into the current account and setup standing orders to the ISA and RSA every month. Does this make sense?

I don't really want to jump from current account to current account every year and would prefer not to do so for the others either.
I've currently got a HSBC current account which I have now realised is crap so need to know what to do with this cash. Also, how difficult is it to tranfer direct debits to a new account?

Thanks in advance.

grumbler

You can find the 'complete solution' in Martin's article: Where to start with savings . He calls it the 'savings fountain'.

BTW ICICI HiSAVE Savings Account is not a regular savings account.

My main current account is always with Nationwide. Their instant access e-savings account always has good interest rate. However, I wouldn't switch from HSBC because of their 8% regular savings account.

Tim_L

Unfortunately there is no "complete" solution. The optimum solution will depend on how actively you want to manage your money, what your attitude to risk is, and what you want to achieve - is this for long term saving, do you have a shorter term goal or requirement, and so on.

Anything you end up with will most likely spread across a number of suppliers, and will contain a mixture of safe (cash) based savings, and higher risk investments if you want to take the chance of better growth for higher risks. You should probably max out your ISA allowance, at least the cash part.

I wouldn't personally be seduced by the HSBC 8% regular saving account which requires you to have your current account with the same provider - because the amounts you can save regularly are small and the amount saved doesn't compound year on year at the headline rate (usually it is withdrawn annually to a bog standard savings account) this amounts to quite a small inducement payment to hold the current account which is not necessarily the best performing or most useful. You can often do better with combinations of other similar products - this was the conclusion I reached when I last looked at this which was 6 months or so ago, so apologies if I've missed something.

My own choice of current account is Cahoot, which has instant transfers between current and savings accounts, and the savings are at a very decent rate currently. I manage the account to minimise the cash in there to exact requirements, so the rate on this account is not of any significant importance to me. I look at my savings rates about once every three months to see whether it is worth switching cash around, and I loaded up my tracker ISA last April (which seems to have been a spectacularly good decision). This year I'm intending to look at some medium risk investments, such as commercial property.

Ultimately it will be worth talking to an IFA, or maybe a selection of IFAs. For some reason many people don't like doing this, but it is a good way of getting some alternative opinions.

icebergx

Thanks Tim, I'll take that on board.

I think I'll do the same and load up an ISA asap, probably the Bradford & Bingley one. I'm also in the process of opening an ICICI account which pays 5.15% and I transfer most of the rest of my cash there (along with most of my salary each month. The only problem with this account is that I can't withdraw cash from it using a cash card, I have to transfer the cash to a instant access account (takes a few days) before I can withdraw it.
My only dilema is wether to dump my HSBC current account (I've had it since I was 6 ) and open a new one. I (obviously) want the highest rate of interest and instant access to my money via cash card. Any suggesytions?
I've had a look at Citibank's Direct Current Account which pays 4.07%AER. Is there anythink better that I'm missing? I don't really want to shift this new current account once it's set up (don't want the hastle of moving Direct Debits, etc). What do you think?

Also, How much hastle is it to transfer Direct Debits? Do I have to tell each Creditor that I'm moving accounts and give them the details or can I let the banks sot it out?

Thanks for your help and suggestion in advance.

Tim_L

It's usually not too much trouble to shift direct debits, though the best thing to do is to leave the old account open and part funded and move them manually one at a time so you can control things yourself. I've had somewhat negative experiences with the switching services. It is less trouble than you might expect though.

I actually have 5 current accounts (for reasons connected with bagging the signon inducements and also because it's handy to have multiple debit cards for casino and bookmaker bonus bagging). Of these, Cahoot is the easiest to deal with day to day by a long way - the call centre customer services is absolute pants, but it's unusual to have to deal with them as the online form works OK.

Maxing the interest rate on a current account isn't necessarily the best thing to do. Often it just makes you lazy about looking for better rates on savings accounts, and it's usually best to squirrel money out of the current a/c to where you can't get at it.