20k Savings BOE Base rate AER Reduction

toocan

First up i know very little about saving money although im pro ball at spending it;)

Ive managed to save around 22k which ive been saving into HSBC's online savings account (the plan is to use it as a deposit for a house when the market start to bottom out).

However as the BOE has reduced the base rate HSBC have reduced the interest im getting now from 4.3% to 2.8% AER so im thinking there must be better ways to maximise my return?

What sort of thing should i be looking into ? premium bonds? ISA's? does the government have any special saving schemes for First time buyers?

help and suggestions appreciated

rb10

Blimey, 2.8% on £22k doesn't sound too good!

toocan wrote: »

What sort of thing should i be looking into ? premium bonds? ISA's?

Premium bonds - well, the rate on them is to drop to just 1.8% from December 1st, so even if you have a taxable savings account you should still be able to do better than this!

ISAs - you can only put up to £3600 per tax year into an ISA. However, being tax free it's always a good idea to fill up each tax year if you have the money, so this'd definitely be a good idea for the first bit (a further £3600 can go in from April 2009).

With the rest of it, the trouble is that all rates are likely to go down very soon, just that HSBC got in early. If you could restrict to 4 withdrawals per year, there are accounts from Halifax and Bank of Scotland fixed at 6% and 5.8% for a year respectively ... the problem being that you have to open and fund them by tomorrow!