Newbie Saver Advice Needed!!

Fat_Boy

Hi,

I have finally decided that it's about time I started putting away some savings for the future, but am unsure about which is the best route for me.

From April I will have £500/month that I can comfortably afford to save, however I am a bit of a coward where money is concerned so I would like my money to go into something that offers me top level financial security (ie - I'm more interested in a secure low growth rate than a high growth rate that has a higher chance of losing my cash).

At the moment I am consdiering the following options:

1) Stick it in a high interest savings account (I have a linked account to my online banking)

2) Premium Bonds

3) ISAs (I have an ISA with Yorkshire Building Society that I have never deposited into, apart from the £10 opening balance).

My only final stipulation would be that I could access my money fairly quickly (within 1 month) without any financial penalties.

Any advice appreciated!

Cheers.

tomstickland

The best paying saving accounts are reg savers which pay 10% (A&L) or 7.5% (Hfax) but only allow £250 per month to be paid in and you can't withdraw until end of the year. They provide the best return though. They are taxed, but even after tax they can provide better return than a 5% ISA.

ISAs are tax free savings. You can open a mini cash ISA and treat it just like an instant access savings acount. It just happens to be tax efficient.

Premium bonds have an average return of 3% according to the post office savings web site. Savings accounts will beat this.

grumbler

Fat_Boy wrote:

...From April I will have £500/month that I can comfortably afford to save

IMO the best strategy is to start one £250 p.m. regular saving account in March. So it will mature next March and you can move £3000 lump sum into cash ISA before April 2007.
Most of cash ISAs are with instant access.

tomstickland

My only final stipulation would be that I could access my money fairly quickly (within 1 month) without any financial penalties.

I don't think reg savers will be any good for this though.

Fat_Boy

grumbler wrote:

IMO the best strategy is to start one £250 p.m. regular saving account in March. So it will mature next March and you can move £3000 lump sum into cash ISA before April 2007.
Most of cash ISAs are with instant access.

I like this idea as it would leave me the other £250 that I could put into an instant access type account and if push came to shove and I needed cash fast there are always ways and means to get my hands on it (and I should know, I am married to them lol!).

Are Premium Bonds not a good idea then in your opinion? I like the idea of having a monthly flutter without the chance of loosing any money!

innovate

Fat_Boy wrote:

Are Premium Bonds not a good idea then in your opinion? I like the idea of having a monthly flutter without the chance of loosing any money!

The only guarantees you have with Premium Bonds are the flutter and that you don't loose your money - but you have no guarantee for any growth. Do a search for "Premium Bonds" on the MSE Forum, there are a couple of other threads with people's opinions and experiences.