Need to raise 9000 in 18mths??

madirishwomen

Hi

New to site, can anyone tell me how to save 9000 in 18mths? Im not sure what savings accounts to use to get the best return. can you help?

I have to raise funds to pay back a family member. I can put money aside each month but dont know which method to use

CluelessJock

I would suggest a regular saver account or a cash ISA would be most suitable, check out which pay the highest interest. Assuming a 5% return and you are a basic rate taxpayer you will need to save £484.64 per month to achieve £9000 in 18 months, if you are not a tax payer or decided on an ISA at the same rate it you would need to save £480.95 per month.

I think it will be unlikely you will get an ISA at the same rate as a regular saver, so tax benefits may be outweighed by lower rate for ISA.

You will also have to monitor the account to check the rate does not go down as this would leave you short in 18 months.

sh856531

Assuming a 5% return

Is it possible to get that sort of return on an ISA just now?

The highest I've seen is nearer 3% although I havent' been looking all that much...

Thanks

S

sh856531

If you're starting from 0, this ISA might be good. 7% "apparently" but only if you start from 0.

http://www.firstdirect.com/savings/

Maximum you can put in is 300pm I think so you would need to save some money elsewhere as well. Might still be worth it given that the interest rate is so high.

Does anyone know if its a scam or has some otherwise undesirable catches?

Best Regards

S

JoeCrystal

Would it be easier just to save five hundred pounds per month into an account without fail and no desire to withdraw the money?

clairbear_3

First Direct 7% ISA
Looks like you have to open a linked bank account and pay in £1500 month

sh856531

clairbear wrote: »

First Direct 7% ISA
Looks like you have to open a linked bank account and pay in £1500 month

Woah - the one I was looking at is 7% but you can only invest a maximum of £300 pm. We must be looking at a different one...

clairbear_3

You misunderstand,in order to open the 7%ISA which u can pay in £300 max per month
You must ALSO open a 1st ACCOUNT which requires you to pay in £1500 min per month(u can remove it )
If I remember this account bears no interest
This plus the fact that u can only pay £300 a month max into the ISA instead of 1 lump sum of £3600 dilutes the 7% offer

sh856531

clairbear wrote: »

You misunderstand,in order to open the 7%ISA which u can pay in £300 max per month
You must ALSO open a 1st ACCOUNT which requires you to pay in £1500 min per month(u can remove it )
If I remember this account bears no interest
This plus the fact that u can only pay £300 a month max into the ISA instead of 1 lump sum of £3600 dilutes the 7% offer

Ahhh. OK. thanks Claire. I guess its one of those ones where you basically have to have your salary or what not paid into their current account.

Fair enough. I was thinking though - doesn't 7% seem dangerously high to you? Even if they are doing the usual - "no transfers in" limitation.

I don't know many other banks that are offering anything like this....

Thanks again

clairbear_3

Although at first glance the 7% looks very generous youre actually only earning that on £1800
Thats because you only able to pay in £300/mnth not the full £3600 from the start
They know that many people will pay £1500+ salaries in current account every month and leave some/most of it in earning zero interest
HSBC have a regular saver offerring 8% similarly you have to open a non interest bearing current account and pay in £500 min

gozomark

if you are trying to save 9000 in 18 months, realistically the interest rate is lmost irrelevant, whether its 1% or 3% or 5%, the difference is small. More important is saving a set amount every month