Maximise my savings! :-)

daleuk_3

Ok.. so im saving towards a deposit for my first home. Target is 3yrs min. I can save around £800 pcm. So £800 x 36 = £28800.

Heres how im saving this monthly sum at the moment:

Barclays - Golden ISA - 3.55%PA (bonus for 1yr) - £300PCM

Barclays Monthly Saver 4.67%PA net - £250PCM

Norwich & Peterborough Building Society - Family Saver (1yr bonus) - 4.8% PA net - £250PCM

Egg Savings Account - 2.28% net PA. (1 yr bonus) - any extra I can save I add here...

Now im fully aware that at the end of the year I will have to take out the money from the monthly savers and find an account for them. Any suggestions for what I should this about doing with this? (I should work out at about £13k - after interest).

However is there a better way to save that using these monthly savers? Should I be using my shares and stocks ISA allowance? I am concerned about the risk involved with this option. But the added benefit of it being tax free is good.

Any advice appreciated. Thanks, Dale.

Rafter

Dale,

3 years is too short an investment horison to be considering stocks and shares.

You could look at some of the NS&I products which are tax free, but think these are mainly linked to RPI inflation - which went negative this morning!

You could also think about savings bonds (fixed) but you run the risk that base rates rise and you are left with fixed rate products.

Other thing to investigate might be corporate bonds - some of those are giving really good yields - but like shares you do run the risk of losing money if the company whose bonds you invest in gets downgraded or goes bust.

R.

hotkee

Barclays ISA and monthly saver makes sense (done same myself)

Market is too volatile to invest in stocks and shares ISA although in long run it would be good coz the bottom of the market was when ftse hit 3600.

Supposing you invest in an shares ISA now (with ftse floating around 4100 mark), its likely one day (cant say when but guess 3 to 4 years), it will hit 5000. So there is profit to be had - question really is to get the best performing stocks and shares ISA which offers good price for the units now with prospect of that price going up with the market.

I have done same as you daleuk apart from not looking at Egg and Norwich & Peterborough. The Egg account is relatively low conisdering you can get 9 month bond with halifax at 3.35 with rate higher for longer term, 4.30% for 1 year with West Bromwich BS.

Even though the rate with N&Peterborough is relatively ok, I do not like postal accounts, prefer internet access although exception for me is the west brom bond which is postal.

Money_Grabber13579

hotkee wrote: »

Market is too volatile to invest in stocks and shares ISA although in long run it would be good coz the bottom of the market was when ftse hit 3600.

I'm glad I've finally found someone who can predict the market! By the way, how'd you know the bottom of the market was at 3600? At 3958.13 (at time of writing) it wouldn't have much further to fall to go below that!

Nobody can say yet that the bottom of the market has been reached!

Lokolo

Money_Grabber13579 wrote: »

I'm glad I've finally found someone who can predict the market! By the way, how'd you know the bottom of the market was at 3600? At 3958.13 (at time of writing) it wouldn't have much further to fall to go below that!

Nobody can say yet that the bottom of the market has been reached!

Unless you have a crystal ball, duh.

hotkee

Before judging other people's comment - read carefully the wording - I said the bottom was when ftse hit 3600 (and it did go down to that mark only a few weeks back).

Whether its the bottom I did not say, I said "the bottom of the market WAS"

NOT "the bottom of the market IS"

You can keep your crystal balls - I prefer to use what common sense I have to do my business and as a matter fact I do ok by anyone's standard. And I do not have any stocks and shares ISA for the pure reason I did lose out around 2001 when markets fell and lost money on Nationwide ISA. But had I kept that stocks ISA investment a few years later it would have made me profit.

So invest if you can gamble with the money and its a gamble - be it slightly better than the lottery.

DiggerUK

DaleUK,

I wouldn't advise anybody to go near the equity markets for quite some time yet.
You seem sharp enough to find A/C's that get you a good return. Carry on.

Life isn't all boring , even savings can be made fun.
Shove some of it in Premium Bonds, interest between 0% and 1 million. Think good fortune. It's also a lift when a win drops on the door mat, plus it's instant access.

Go for the house, cheap as chips for now, and prices going down lower it seems.

All the best.

SavySaver_2

Once you monthly savers mature transfer the balances to your isa for 2010/2011 tax year? At least then you will have lumps sums to put in the isa and then you can start new monthly saver accounts. Just an idea....

daleuk_3

Hey guys, cheers for all the advice.

I think since my view is quite short term. For now ill stick with switching to the highest paying ISA every year.

Dumping money earned from the monthly savers straight into here. Filling up the ISA asap.

DiggerUK - Premium Bonds - I have never really considered these... do you know more about the chances of getting something? I know there is the big prize but how many more smaller ones are there?

Iv also been considering sticking the extra I have into Zopa... seems to get good returns with lowish risk...

Reaper

daleuk wrote: »

DiggerUK - Premium Bonds - I have never really considered these... do you know more about the chances of getting something? I know there is the big prize but how many more smaller ones are there?

Can't say I agree with Premium Bonds. The returns are too small. Read "Premium Bonds Are They Worth It"

Iv also been considering sticking the extra I have into Zopa... seems to get good returns with lowish risk...

Remember you are looking at current returns with past risk figures. It is entirely possible the rate of defaults will rise as the recession continues. I'm not saying don't do it, just don't put too much faith in the stats.

Money_Grabber13579

hotkee wrote: »

Before judging other people's comment - read carefully the wording - I said the bottom was when ftse hit 3600 (and it did go down to that mark only a few weeks back).

Whether its the bottom I did not say, I said "the bottom of the market WAS"

NOT "the bottom of the market IS"

But that's exactly the same thing. You've just said that the market won't go below 3600. But nobody knows! When people talk about the bottom of the market, it means that the bear run has just about finished.

Are you trying to say that 3600 has been the lowest it has dropped in several years?