The Savings Fountain Discussion Area

rosyrush

I am a novice-recent joiner ofMSE but need some advice... would like to use a lump sum of 30,000 (from retirement) in best way and already have cash Isas... so after reading the Fountain articles, I'm wondering about using it as many of above are doing.... But am unclear about procedure and difference between the Standard/Regular/Savings account option. I have a Nationwide postal account... and one other savings account. Does anybody have the patience /time to describe to me using a 1, 2, 3 etc list of instructions as to the procedure needed for the "drip feed option" into one of the accounts mentioned, like Derbyshire or Nottingham or Alliance and Leicester? I don't need to have instant access for a year or two...Many thanks in advance, from Puzzled Pippa

lordgaz

Re: Setting Up a drip into a regular savings account:

Hi, I have set up my £3000 ISA with Abbey and I am just about to apply for the Abbey regular saver account.

My problem is how to drip feed in £250 a month from my Egg savings account.

I can't seem to find the facility to set up a regular payment from the Egg ac.

Can you suggest a solution, (I have a standing order form from Abbey for the regular saver AC, but I am unsure if it will work with the egg account)

Can you suggest a good high interest intant access account that allows standing orders if the Egg one doesn't work?

Cheers in advance...

GAreth

kah22

David 78 said try premium bonds and that is, I think, a very good idea.

A few years ago I started to buy PB's £100 here £500 just when I had a little extra cash at my disposal. Once I hit £1500 it began to pay dividends I have now won about £1k and I automatically reinvest it.

At present I have my target set at £10k and most of that will be through winnings. OK you need a little luck, but it only takes you to be lucky once - and now that I've discoverd MoneySavingExpert maybe my luck is beginning to turn.

Jpotter_2

Hi,

I'm new to all this and am trying to work out where to put an inheritance my family has just obtained. The figure is £175,000 and we don't know where to put it for max yields. The added complication is that we need the interest to go to my mother-in-law who is in a care home to pay for her care. This raises tax issues of course.
Any help would be most appreciated

tiny1

Martin - what a great site

Could you and other experienced MSE's please kick start me with some advice and direction.

I am a Brit expat employed in the gulf area on a tax free income.

My wife and children are in UK.

I send all my tax free income to UK each month - joint Halifax account, direct debits are set up to pay mortgage, insurance, rates etc.
The good wife spends whatever is left

I want to set up a savings fountain before my wife gets to spend what I earn on doodads which are a waste of money.

I admit to being totally confused on what type of savings "vehicle" to use. Would it be correct to set up yet another direct debit and transfer funds to an ISA in my name, my wifes name and the childrens name ?

If so which ISA would you advice?.

Would transferring the tax free income into premium bonds be a better strategy ?

Have I got it totally wrong - if so please advise on a better strategy ?

sorry for being so dim, I feel isolated out here and I have nobody to bounce savings advice with.

tiny1

Katie

Hi Martin. We've got a Virgin One current account mortgage which charges interest on what we owe at 5.95%. When we opened our account they said that we were better off having all our money in the Virgin One account than having any in savings accounts as keeping the money in the account will lower the amount of interest paid. This seems to have worked for us as we are set to pay off our mortgage in about 6 or 7 years instead of 25! But do you think we would be better having ISAs as well as our One account?

Thanks

Katie (first time 'poster')

paul666

... Virgin One current account mortgage which charges interest on what we owe at 5.95%. ... better having ISAs as well as our One account?

The ISA would have to do better than that rate. Unfortunately, most of the ISA's have restrictive conditions on them like a) you can only have £3,000 / year, b) you can't take the cash out then put it back and c) if you see a better rate and want to transfer it'll either take weeks and you may incur a £25 penalty.
You've done well so far, and a virgin one account is a no brainer - never having to worry about if your money is working hard enough, because most of the time it is. Just keep remembering to pay those bills as late as possible and use a cashback credit card constantly (not the virgin one 'credit' card)

ED

Just seen this thread for the first time in ages. As several people have gone unanswered, here are a few ideas... (For actual advice, maybe some of you have by now consulted a Financial Adviser...?)

Lordgaz - I see 4.75% gross interest is currently offered by Egg.

4.85% is available from Coventry Bdg Society for their 'NetSave' account (£1 minimum balance). This allows customers to set up, online, Standing Orders - eg to regular, monthly savings accounts with banks and other bdg societies (such as Derbyshire's one paying 5.85%). At least one banking day before your SO is due to go out, you could supply the NetSave account with funds from Egg or elsewhere (allowing for BACS transit time - typically 3 or 4 banking days).

Jpotter - Have you made your decisions, by now, for the £175,000? Hopefully you chose to spread it between several financial institutions (maximum of £35,000 with each), just as a precaution.

If you are still seeking savings accounts paying highest interest, have you explored links from this site to MoneySupermarket website? Perhaps some of the money could go to Nottingham Bdg Society's 'Post It' account which pays 5.50% gross (90 days withdrawal notice required). Alliance + Leicester's 'Online Saver' offers 5.35% (overnight access via their cheque account).

tiny1 - Perhaps the Coventry BS 'NetSave' account would be useful for you to filter up to £1,000 per month into Derbyshire BS's regular, monthly savings account using Standing Order.

rosyrush - True, it does take a little patience and perhaps courage to drip feed a capital sum via monthly Standing Orders. However, it is very satisfying to see the 'pot' grow, especially with accounts such as Derbyshire Bdg Soc allowing as much as £1,000 per month to be deposited. So, one year hence £12,000 of your £30,000 nest egg could be in Derbyshire's care. It gets exciting when calculating the approximate amount of interest likely to be gained @ 5.85% in Derbyshire on yearly average of £6,000, compared with X% where your money is at the start.

Your last post, here, was way back last October. So just wondering if you went ahead with the Savings Fountain principle...? Any questions?

lipidicman

ED wrote:

It gets exciting when calculating the approximate amount of interest likely to be gained @ 5.85% in Derbyshire on yearly average of £6,000, compared with X% where your money is at the start.

You can do the calculation better

Do 1.0585^(1/12) (thats to the power of - there is no superscript here!) for the 'monthly rate' and we will call this 'm'

end of | balance why doesnt formatting work here?
month |
1 | 1000*m
2 | (1000*m + 1000)*m
3 | ((1000*m + 1000)*m +1000)*m

You can see this is 'iterative'. Each time you add 1000 and multiply by 'm'

This will cheer you up as the figure you get is slightly larger than the method you described! It is a more accurate way of calculating the interest - the banks will be even more accurate and do it daily.

But then you have to do the reverse on the account you are drip feeding from ie take away 1000 and multiply by the appropriate amount!

tiny1

Thank you ed