The Savings Fountain Discussion Area

Beb48

Hi

I have just sold my house and have moved into renatal accomodation to avoid a chain. I have £55000 that I want to save somewhere for 3 - 6 months (ideally tax free) would the fountain be the best option for me?

Also does anyone know if there is a limit on the money that can be moved before transfere fees are incurred

Thanks

LittleWitch_2

Hi,

I'm a bit of a money saving moron... I've never really understood banking or saving or pretty much anything to do with money (other than spending it and running up major debt, that I have down to a fine art). I'm about to sell my flat, mostly to pay of the above mentioned major debt, and will have about £18,000 left over thanks to the insane property pricing at the moment. I want to save the money but don't know what to do with it. The idea my parents and I have come up with is to put the money into savings and also to add to it every month with the disposable income I will now have after I moved home. Eventually the money will be used as a deposit for a new flat or house but I can't forsee needing the money for another year at the least.

So I'm lost and in need of guidance. Everyone has an opinion and they all disagree with the other. My parents think putting the money in a high interest savings account with 1 bank is the way forward whereas a friend of mine thinks that investing is the way forward as I won't make any money just by saving it. I understand that investing the money means I might come out with less than I put in which is something I'm not sure I want to risk.

Does anyone have any suggestions?

Thanks.

jamesd

Beb48, a high interest savings account is usually best for that unless you'll be leaving 3000 in the cash ISA afer the new purchase.

LittleWitch, cash ISA then regular saver accounts and finally high interest savings accounts is the way to go with that. You can use the 18,000 to fund the payments into the regular saver accounts, paying a total of ( 18,000 - 3000 ) / 12 = 1,250 a month into them. Any extra savings from income can go into the savings account that you ahve feeding the regular savers via a current account:

Salary + 15,000 -> savings account -> regular monthly payment to current account -> regular saver payments.

emmamc252

my biyfriend and i are buying our first house and as we both live at home currently we are more than a little nervous about bills etc as we really don't have any personal experince, we just have a rough idea from our parents predictions. for this reason we think we are going to get an interest only wortgage and save what we can each month towards a lump sum. we are looking at a 5year fixed rate mortgage as again we want teh stability. we expect to be able to save at least £200 a month as we aren't getting too high a multiple or anything. what sort of savings account would you recomend for this purpose? we have used isas for saving previously however we are looking at this as our safety net so that if heaven forbid something toally unexpected happens like the roof falls off the house, not that it should, but just in case, we would have the money there to take care of it without having to borrow more. neither of us have any debt, advice please!!!!!

Jonbvn

emmamc252 wrote: »

my biyfriend and i are buying our first house and as we both live at home currently we are more than a little nervous about bills etc as we really don't have any personal experince, we just have a rough idea from our parents predictions. for this reason we think we are going to get an interest only wortgage and save what we can each month towards a lump sum. we are looking at a 5year fixed rate mortgage as again we want teh stability. we expect to be able to save at least £200 a month as we aren't getting too high a multiple or anything. what sort of savings account would you recomend for this purpose? we have used isas for saving previously however we are looking at this as our safety net so that if heaven forbid something toally unexpected happens like the roof falls off the house, not that it should, but just in case, we would have the money there to take care of it without having to borrow more. neither of us have any debt, advice please!!!!!

Hi Emma,

I would recommend that you post this question in as a new subject/topic, rather than on the tail of a completely unrelated subject.

Anyway in answer to your question, since you are only saving £200 a month, ISA's will offer you the best return since they are tax-free. Hopefully, as time goes by and your income hopefully increases, you can consider a repayment mortgage and/or you can increase the amount saved.

HTH.

Naz19

Hi, I am a bit confused. I am only able to save £600 a month which I am not sure how to save ie do i put half into an ISA and the rest in a saving acc - I want to save to buy a car and also put aside money for a holiday but with such small amount that I can save (then eventually a house).
Please can you advise what the best plan is

Thanks

(btw i have no debts other then paying off student loan).

bobo74

Hi I have approx £60000:00 to £70000:00 to save; mortgage is paid and have pension of £13000:00 per yr. Still earning approx £50000:00 per yr (not including pension). Will retire in about 4 yrs with full state pension. Will probably have increased above large amounts to £100000:00 by final retirement.

Where to put the money?

swod61

Sorry but hopeless at working best accounts out but if somebody could help would be well appreciated
what i am basicly after is my son is 21 in sept and for his 21st we want to start a monthly savings account up with a £1500 deposite then £25 month for 2years could some body please tell me the best thing to do for him Thank's he is not a tax payer as he is a student and we dont want him to have access for 2 yrs i am allso a low tax payer dont now if this will make a difference thank's again:)

bulb

Hello, I'm a first year student and I'm eager to start saving because it's very tempting to waste money at the moment. I would like to minimise my uni debts. I was wondering what kind of savings account would be best for me?

momist

I note that this is an old thread, but the Savings Fountain has just appeared again in the weekly email, and I'd not seen it before.

Last week's email had a heads up for the superb rate of interest that First Direct are offering for their regular savers (current account holders only) and, for a "regular saver" from income, that can't be beaten. However, I did a calculation for drip-feeding one of those from an existing instant access account I have paying 3.25% (sorry, not currently available to new investors), and the 8% interest doesn't measure up as worth the hassle. Since you only get 8% on £300 (maximum monthly investment) for the first month, and then 11/12ths on £300 for the second month, etc. The last £300 only gets 1/12th of 8%. I'm nearly better off leaving the money where it is, and getting 3.25% on ALL of it for a year. On a maximum investment, I could gain a total of £16.22 for the chore of remembering to transfer the money manually each month.

I would guess that with current pitiful interest rates, a calculation like that needs to be made before you choose to drip feed a regular saver from existing savings. Even at higher rates, I bet there's not much advantage. Regular saver accounts are best for savings from income, and I suggest they should not be the second tier of the fountain, without some caveat.

Edit: You can check out the difference in savings interest for regular savings against lump sum savings using this tool:
http://www.thisismoney.co.uk/money/saving/article-1633419/Monthly-lump-sum-savings-calculator.html