were clueless about savings

laurad85

hi, im hoping some of you can help me. me and my partner are currently saving for a deposit for a house and we have £3,000 so far. weve just started saving but hope to have between 7 and 10 thousand by the end of the year. The only thing is we dont know anything about savings accounts or what to look for. i know its not a savers market but would stil like to make the most interest i can. were pretty clueles so any help will be greatly appreciated.

thanks in advance
x

opinions4u

laurad85 wrote: »

me and my partner are currently saving for a deposit for a house and we have £3,000 so far.

Great start. Keep saving and you'll enjoy a lower purchase price in the future too as prices drop.

weve just started saving but hope to have between 7 and 10 thousand by the end of the year.

Make sure you know how much deposit you will need, and add on things like survey costs and solicitor fees too. Not to mention having a bit more for furniture!

The only thing is we dont know anything about savings accounts or what to look for.

Use sites like www.moneysupermarket.com/savings to work out the best rates for savings accounts.

i know its not a savers market but would stil like to make the most interest i can. were pretty clueles so any help will be greatly appreciated.

While it may not be a 'savers market' you can still find savings accounts that do exactly the same thing, but one will pay 0.1% and another will pay 4.0%. So it's right to shop around.

I would consider the following:

1) Open up a cash ISA that allows easy access - this will pay you interest without deducting tax. These can only be opened in sole name though, so you may wish to pay in £1,500 each from your existing funds. Limited at £3,600 per tax year per person. So you can pay in up to £14,400 between now and 5th April 2010 (up to £3,600 each between now and 5th April and a further £3,600 each from 6th April) and not have to pay tax on a penny of interest.

2) Consider opening up a regular savings account. These tend to pay higher rates of interest if you can commit to saving monthly for a full year. Some will allow joint accounts, others won't. Key note: Don't do this if you know you'll need the money within a year.

3) Nearer move time, I'd suggest opening up an instant access account where you can easily transfer funds to and from an existing current account. You may be writing out some big cheques!

Don't get hung up on the money needing to be in a joint account though. If you can't trust somebody to look after the money in their sole name, you don't want to live a lifetime with them!

The main advice I can give is to retain your discipline. Keep focused on saving as much as possible. Just because rates are low doesn't mean the savings habit isn't a good one.

Best of luck.

laurad85

thanks for your quick reply! youve pretty much answered everything we were curious about, your a star!

Mikeyorks

opinions4u wrote: »

Limited at £3,600 per tax year per person. So you can pay in up to £14,400 between now and 6th April

You don't normally need correcting ..... but whilst your brain was (quite rightly) on Cash ISAs .... your fingers have slipped into full ISA mode. Which, of course, you wouldn't be recommending in the current climate allied to the OP circumstances?

So - to the OP - fully endorse that easy access Cash ISAs are the priority - assuming you are both taxpayers. The limit is £3600 (each) per tax year - which means you can put away up to £7200 in the next few months (tax free). And then a further £3600 each in the year from 6th Apr 2009.

Also endorse that Regular Savers are your next best bet (and may be the first one if one of you doesn't pay tax?) .... to take 'new money' direct from your monthly excess.