Student needing better saving account!

Mela121

Hi,

This summer (2009) i'm going to be graduating - over my course i've been saving up what I can and currently have approx £5000 in a HSBC Flexi Saver.

The interest im currently getting in my Flexi is rubbish and i'm wanting to move either all of it or some into a better savings account or an ISA (i know i cant put the whole amount in there)

I'm not very savvy when it comes to finance-talk so please help me find something simple

Any one help? Thanks!

Lokolo

Well if you open up an ISA now and fund it before April 5th you can then open up another one on April 6th and put the rest in that

http://forums.moneysavingexpert.com/showthread.html?t=401374

Theres a list of the best ISAs atm.

Mela121

How is the HSBC cash e-isa? It says it has a variable rate of 2.75% AER (2.72% Tax Free).

Here's a link: http://www.hsbc.co.uk/1/2/personal/savings/cash-e-isa;jsessionid=0000P8vp0MHlJzpCpEdnihevWIU:12ntf1n0a

Thing is i really don't know much about the finance-language- could someone tell me what things like "variable rate" mean and so on - sorry but i really don't know

rb10

Mela121 wrote: »

Thing is i really don't know much about the finance-language- could someone tell me what things like "variable rate" mean and so on - sorry but i really don't know

"Variable rate" means they can change the interest that they pay you as and when they like. It will usually roughly follow changes in the Bank of England's base rate (i.e. if the base rate rises by 0.5%, the interest rate they pay you will quite likely rise by around 0.5%).

"Fixed rate" means that the rate will not change at all for the term of the account. So if you open a fixed rate account for a year at 3%, then they cannot change the interest rate that they pay you at any stage before the year is up.

A small number of accounts are guaranteed to "track" the Bank of England base rate. These accounts promise to follow any change in the base rate, so, if the base rate goes up by 0.5%, the interest rate on your account will also go up by 0.5%. (The difference between this and a variable rate is that with a variable rate, the bank can do what it likes, so will often make larger cuts.)

Lokolo

Variable means the rate can change at anytime.
Fixed means the rate is fixed for a certain period.

You want to look at the AER rate. The rate in brackets is the amount you get per month, but due to compounding you get a better rate, the AER rate, if you keep the interest inside the ISA.

The e-ISA just means its electronic, i.e. online only, rather than a branch thing.

loulou41

Check the Yorkshire BS e-saver, the rate seems competitive. Son has 31k with HSBC online bonus saver and it is paying a mere 1.4% net with restrictions.