Help I Am Confused With Savings

williamsa_2

Hi i am really new to this. I have a current account and always saved in a regular savings acount.

With new year here i decided i need to think about my finances more.

Today i set up 2 e savings acounts to try and make some interest. I am looking to save 200 a month. I need access to it, and i am trying to save for holidays treats etc.

i have looked a mini ISAs but not sure if that will be better than just the e savings accounts.

any advice would be great
Also i anyone knows of a high interest e saver please let me know

Thanks

YorkshireBoy

If you need access to your savings then that would presumably eliminate regular savings, as most (all?) don't allow partial mid-term withdrawals.

Therefore, I would suggest (with £2,400/annum being saved, less holiday withdrawals etc) that the ISA may be your best option.

Take a look at the Halifax ISA Direct at 5%.

innovate

willliamsa, if you haven't already done it, read Martin's relevant articles on savings. These should answer your questions on best accounts, and on ISAs as well - but main point is that you get your interest without tax deduction, so this is likely to be worth something!

If you still need/want to set up a high interest account, check out whether you can get any cashback via Quidco or TCB (e.g. for opening a Cahoot savings account, you can get £25 cashback at the moment! That adds nicely to the nice interest rate you get!)

ReportInvestor

YorkshireBoy wrote:

If you need access to your savings then that would presumably eliminate regular savings, as most (all?) don't allow partial mid-term withdrawals.

Are you sure?

With most building societies you used to be allowed mid-term withdrawals - typically one pa but sometimes more (e.g. 2 at West Brom & Chelsea). Obviously check the terms & conditions of individual accounts as they do change over the years & my info relates to when I checked out the market in late 2004.

williamsa_2

Thanks for this

sorry i meant i have an instant savings!!! not regular.....

if i open an isa for example with halifax, would they credit the interest monthly or annually? it says that i can have access to it regulary...

from nice but dim

williamsa

ReportInvestor

I agree with YB that the ISA is your best option because of the tax free interest.

If you are a basic rate taxpayer then 5% in an ISA = 6.25% in taxable account because the taxman grabs 20% interest.

I would be surprised if the interest was paid monthly, but that doesn't stop you making withdrawals. The only rules are that you can only invest £3,000 in any one tax year which starts on April 6th.

YorkshireBoy

ReportInvestor wrote:

Are you sure?

No, that's why I said 'presumably'.

OP was almost making a list of things that they were going to want to draw the money out for. Bearing in mind most (all?) of the regular savings accounts have some form of withdrawal restriction, I suggested a high interest (ISA) account that paid the same whether withdrawals were made or not - and as you rightly pointed out, this equates to a gross rate of 6.25% in a standard account.