Best saving account for me please

fozmcfc

Hi,

I'm getting to the stage where my bank balance is about to overtake the loan amount I still have owing with Natwest.

Now I'm mindful of the fact at anytime they could take all the money I've saved and use it to pay off my loan with them, thus leaving me with nothing or very little in my account.

So what I'm looking at doing is putting £2000 into a saver account and then set up a direct debit from my bank account for £300 a month to put into a saving account.

I don't want anything complicated just an account where I can sort out and access my account online and I can withdraw money anytime as many times as I need to (not that I intend to, but you never know in life).

Any suggestions ? thanks.

opinions4u

www.egg.com paying 3.25%.

Alternatively take a look at www.moneyfacts.co.uk and see what else there is.

(personally I'd pay the £2k in to Egg and stick the £300 a month in to a Halifax Regular Saver at 5%, but that shouldn't be touched until 12 months down the line - depends on how simple you want things though!).

Now I'm mindful of the fact at anytime they could take all the money I've saved and use it to pay off my loan with them, thus leaving me with nothing or very little in my account.

If you are behind on loan payments, I'd get them up to date at the earliest opportunity to ensure an improved credit record.

gozomark

I'm mindful of the fact at anytime they could take all the money I've saved and use it to pay off my loan with them

if they are able to recall the loan, then having your savings elsewhere won't make a lot of difference...

CLAPTON

fozmcfc wrote: »

Hi,

I'm getting to the stage where my bank balance is about to overtake the loan amount I still have owing with Natwest.

Now I'm mindful of the fact at anytime they could take all the money I've saved and use it to pay off my loan with them, thus leaving me with nothing or very little in my account.

So what I'm looking at doing is putting £2000 into a saver account and then set up a direct debit from my bank account for £300 a month to put into a saving account.

I don't want anything complicated just an account where I can sort out and access my account online and I can withdraw money anytime as many times as I need to (not that I intend to, but you never know in life).

Any suggestions ? thanks.

unless you are in default of the loan agreement or have a poor payment history there is no reason to assume they will raid your current a/c to pay the loan off.

in any event, it doesn't make much sense to be paying interest on a loan and then have saving. (asssuming the loan APR is higher than the savings AER

fozmcfc

Thanks for the advice guys.

Gozomark yes I guess that's true but I would have thought they are much more likely to do such as thing, the more interest they are paying me.

fozmcfc

At the moment I don't have enough savings to pay off the loan and live for the rest of the month, but will do in 3 or 4 months time, if I continue to save as I have this year.

The thing is I have worked hard this year to save up and as much as it's sensible to pay off the loan as early as I can, I simply can't face seeing 12 months savings just disappear, even though I know I will have cleared off a loan which isn't due to finish until July 2012 early.

The loan was originally for £7500 and the interest was put on top of that and that's the amount the loan started at. It is now down to £7000, so I'm guessing the interest is now paid off it. I have no problem in meeting the loans £200 a month repayments and on top I'm still save between £400 - £600.

[Deleted User]

Hi,

why not pay extra each month to the loan,

£7000 @ £200 p/m = 35 months,

£7000 @ £300 p/m = 24 months,

£7000 @ £400 p/m = 18 months,

that way you still have your savings, and loan is paid off early, and maybe in a year or so when loan is down and savings are up you may feel happier about paying loan off completely.

Edit: you say interest was added at the start of the loan, so it's not as if paying off early will save you money, only get it out of your mind.

Tim_Nicholas

[Deleted User] wrote:

Hi,

why not pay extra each month to the loan,

£7000 @ £200 p/m = 35 months,

£7000 @ £300 p/m = 24 months,

£7000 @ £400 p/m = 18 months,

that way you still have your savings, and loan is paid off early, and maybe in a year or so when loan is down and savings are up you may feel happier about paying loan off completely.

Edit: you say interest was added at the start of the loan, so it's not as if paying off early will save you money, only get it out of your mind.

+1, overpay it and still save at the same time..

CLAPTON

fozmcfc wrote: »

At the moment I don't have enough savings to pay off the loan and live for the rest of the month, but will do in 3 or 4 months time, if I continue to save as I have this year.

The thing is I have worked hard this year to save up and as much as it's sensible to pay off the loan as early as I can, I simply can't face seeing 12 months savings just disappear, even though I know I will have cleared off a loan which isn't due to finish until July 2012 early.

The loan was originally for £7500 and the interest was put on top of that and that's the amount the loan started at. It is now down to £7000, so I'm guessing the interest is now paid off it. I have no problem in meeting the loans £200 a month repayments and on top I'm still save between £400 - £600.

Unless it is an HP loan then the interest was NOT added at the beginning of the loan... although it MUST show you the total commitment (i.e. amount borrowed plus total interest payable if the loan runs its course).

So paying early will lead to reduced interest being paid. The exact amount depends upon the APR, monthly payment and period of the loan etc.

Your loan agreement should show illustrations of the payment terms if you pay in full at the 1/4, 1/2 and 3/4 periods of the loan.
You will need to ask for a settlement figure.

00ec25

i agree with Clapton you should not be thinking about savings if you have a loan outstanding, you should be focused on paying that off

with all respect you do come across as somewhat lacking in knowledge of finances,:
- the chance of a bank raiding your savings unless you are in arrears is slim, you should not base your decisions on that factor, there are many more important ones than that , not least being you have a loan which is costing you money yet you could have significantly reduced this and could soon pay this off early if you try
- find out if you will be charged extra for paying the loan off early (maybe called an early repayment or redemption charge)
- overpay if possible as others have advised
- check what interest rate you are paying on the loan and work out the difference between the loan rate % and the savings rate %, this will tell you how much you are costing yourself each money by not paying off the loan and therefore show you why you should not be trying to find savings rates when you owe money on a loan