Where best to save?

kathydck

i have £4000 which i need to save. would it be best in a savings account and monthly amounts put into a higher intrest regular saving account i have two children ) therefore could open acc. in their names, or am i going to earn more interest by using a cash isa? can anyone help thanks.

isasmurf

Anyone help Kathy?

ReportInvestor

I assume you are a taxpayer, Kathy.

You could get around 5% gross (no tax) on £3K of your £4K in an ISA eg Bradford & Bingley.

Or why not try National Counties guaranteed ISA at 5.1%. There is a ten day loss of interest on transfers out but NC are pretty reliable at not dropping their rates suddenly like some others.

The other money is probably best in children's accounts which will be tax free.
FURNESS BUILDING SOCIETY - Young Savers - 4.85%
LOUGHBOROUGH BUILDING SOCIETY - Penguin - 4.85%
SAFFRON WALDEN BUILDING SOCIETY - Ladybird - 4.90%

All look good at £500 x 2 separate accounts.

kazd

Ok this is my advice but welcome to hear from anyone else. Open two Halifax Regular Savers in your childrens names which you can put in £100per month ea. So for that you need to set aside £2400 for the drip feed. You need to store that money somewhere with a decent interest rate. Not sure what the best instant access account is, I currently have mine in Cahoot. The rest you could put into a cash ISA, maybe the Alliance and Leicester. You could put £3000 in the isa but when you have to dip into it to feed the Halifax you won't be able to replace it in this tax year.

The Halifax is paying 10% which is gross because its in the childrens names, you will also have to open Halifx save 4 it accounts for them for the money to be transferred into at the end of the year. The Halifax do a 7% regular saver for Adults but you will be liable for 20% tax on that one which will I believe bring the interest rate down to 5.6% but this is a regular saver where you can only put in £250 per month. You might be able to find an account that nearly matches it which will earn interest for the whole amount from day one.

Hope you understand this