Hey Guys - New Moneysaver Here, Need Help Choosing Banks/Accounts.

Joosh

Hey guys.

I'm new on here and have already read through the majority of the banking/accounts section of the website, including ISA's, regular savers etc.

I'm still quite confused and stuck as to what bank/account to get for my needs, it would be okay if some of the ones I originally decided upon accepted people under 21 (ahem, A&L), but they dont and its left me with a decision that I dont like as im not used to this.

I need an account for my wages to go into (around £950 a month after tax) and then I would like to save some with another account, and also have another account for paying for stuff like insurance etc (monthly things) via direct debit.

So its looking like 3 accounts, one current account for wages to go into, which has standing orders to the savings account for a set amount a month to be saved, and another account with another standing order for a set amount to go into it, which then has direct debits to pay for monthly bills etc.

Iv looked at regular savers and ISA's, they are obviously the best for savings, but 2 of the bank accounts iv described above would have money leaving them every month. SO it seems they would both have to be current accounts.

So if I have 2 current accounts and an account so save in, what should it be, an ISA or a Regular saver? Or have both somehow?

Why would you have both though? I know some people do but I dont know why or what the advantage is.

Thanks alot guys! Much Appreciated.
~Josh

456789

Some savings accounts also allow payments out each month - whether they allow standing orders, direct debits or just manual transfer is upto the bank

If you need branch service choose from one of the banks nearby for your main account

The ISA is better as it is a) tax-free b) you build up a stash of money that earns interest tax-free in the future aswell - disadvantages are c) if you take money out you lost the tax-free benefit forever d) sometimes normal savings accounts after tax deduction can pay more than some isa's however

The reason people have both is because you can only put £3600 into an isa per financial year and some people don't like taking money out of their ISA and see it as a long term saving (I mean a cash ISA by this - Stocks and Shares is also available but maybe you shouldn't try that yet)

How long do you want to save for? Is it for a specific purpose i.e. deposit?

You can have both an ISA and a saver - in fact you can have as many bank accounts as you like (subject to them accepting your application)

Joosh

Thanks for the reply.
Im looking at saving for over 5 years.

Im just very stuck between how to sort these accounts, mainly, ISA or Regular Saver.
My friend tells me she has an ISA paying 4% and a regular saver paying 10%, which means the regular saver would be better yes?


Are there any out there like that?

psychic_teabag

I'm curious as to why do you want separate current accounts for wages and direct debits. I've seen other people talking about this, and wonder if I'm missing some trick. Just seems that a bank is more likely to give you a free overdraft on an account that's receiving salary (eg I think natwest give me an interest-free £100 buffer, though I don't use it), and if you want that anywhere, it's on account that's paying out direct debits and things that vary slightly month to month.

I suppose I can see benefit of squirelling away a set amount to pay for monthly fixed costs though. I try to keep current account balance at a minimum, and it's a bit of drag having to keep track of what cheques are pending at any one time.

I don't know of any savings accounts that allow (outgoing) direct debits - someone else asked about that a few weeks back. And when savings accounts allow standing orders, it's often (but not always) only to a linked account which has to be a current account. eg citibank and I.F. allow standing orders. tesco allows one-off payments to be set up to arbitrary accounts at arbitrary future dates, but I don't think it has regular payments.

456789

People have seperate current accounts to make it easier for them to understand how much they have going out on bills etc. so that they don't end up spending rent money on nights out! It is possible to do it all in one account fine though.

Joosh wrote: »

Thanks for the reply.
Im looking at saving for over 5 years.

Im just very stuck between how to sort these accounts, mainly, ISA or Regular Saver.
My friend tells me she has an ISA paying 4% and a regular saver paying 10%, which means the regular saver would be better yes?


Are there any out there like that?

There are some 5-year fixed rate accounts but you will lose out if interest rates rise in that period - and they may have long notice periods or not allow withdrawals

The regular saver is not necessarily better - regular savers tend to allow an amount to be deposited each month i.e. between £20 and £250 - firstly interest you earn will have tax taken off it seondly it will be 10% yearly - so the amounts you put in after month 1 will get less interest

Have a look at: http://www.moneymadeclear.fsa.gov.uk/hubs/home_savings.html#at

http://www.fsa.gov.uk/tables/bespoke/SavingsAccount#at

Joosh

456789 wrote: »

People have seperate current accounts to make it easier for them to understand how much they have going out on bills etc. so that they don't end up spending rent money on nights out! It is possible to do it all in one account fine though.There are some 5-year fixed rate accounts but you will lose out if interest rates rise in that period - and they may have long notice periods or not allow withdrawals

The regular saver is not necessarily better - regular savers tend to allow an amount to be deposited each month i.e. between £20 and £250 - firstly interest you earn will have tax taken off it seondly it will be 10% yearly - so the amounts you put in after month 1 will get less interest

So could the 4% be BETTER than the 10% Regular Saver? Even if I dont have money to start with in the ISA... it will be monthly just like if I had a regular saver.

Thanks.

456789

Possibly - and once you start putting cash into an ISA you will be building up a tax-free pot - and once you earn interest you will earn more tax free interest on the interest thanks to compound interest.

Which accounts specifically did you have in mind - in generalities all accounts have their positives and negatives

Joosh

Unfortunately the ones I had in mind wont work any more, and the person who has the 4% ISA and the 10% regular saver told me they werent that good (probably because they have better).

Current Account: A&L Premium Account, £100 Cashback (+£25 cashback if you go through "onepoll cashback"). 0% on Overdrafts for a year and a decent interest rate. Unfortunately it is 21 years old and over who can get the account. So i no longer have any idea who to go with. It can be anyone really as I have Barclays/Lloyds/Natwest/HSBC/A&L near me and Abbey etc not too far away.

Second Current Account: Money wont be in here long its literally direct debits for bills etc, so I could use the current account that I have at the moment, Barclays one, only 0.1% in Credit Interest but it just needs to hold the money.

Savings Account: Can be an ISA, Regular saver or both. I had a look at (and liked) the First Direct ISA mentioned in the "Top Cash ISA's" on this website. But the interest rate still seemed low at 3%. I know im probably being picky and theres unlikely to be anyone better but I got told that a 5% AER ISA was bad only a few weeks ago.
The regular saver I was looking at was either to be the Barclays one or any other to be honest. With the savings account I dont care about access to the money for at least 5 years. So fixed terms/withdrawal limits are not a problem, but the interest rates are.
Fixed or Variable rate is another problem I have as I cant predict the rate change really can I, especially on a 5 year term (with which I could get a 5% AER regular saver) and a 4+% AER ISA (I think).

Im not looking for anything with a monthly cost. But I might consider a credit card too (but with a direct debit from one of the current accounts at the end of the month). It would need to be a 0% EAR rate for at least a year and hopefully a freebie or cashback sum given upon taking the card out.

Thanks!
~Josh

456789

You could try the abbey account:

The Abbey Bank Account

- 6% AER/ 5.84%gross (fixed) for the first 12 months from account opening on balances up to £2,500.
- 0% interest free Advance Overdraft for the first 4 months from account opening.

or the Halifax Reward account (needs £1000 credit each month but you could just take £50 of your wages out and put it back in to make it up to £1000)

The FD ISA looks ok you will get 3% guaranteed until Nov next year and then you could transfer it to whatever the best available product is then.

Take a look at: http://forums.moneysavingexpert.com/showthread.html?t=401374

and http://www.moneysavingexpert.com/savings/best-regular-savings-accounts (some don't allow you to miss payments in a month or make withdrawals and if you do the rate can go down)

Joosh

What about this ISA then? (from the page you just showed me).

Leeds BS Fixed Rate ISA - 4.60%
Minimum deposit: £1.
Notes: Fixed until 31/10/2014.

Its fixed for 5 years, it all depends whether interest rates for other account will or wont increase within 5 years. Hmm.

cuedini

Is it worth opening an ISA with the new tax year nearly here?