Savings advice for a clueless monkey

clueless_money_monkey

Hi All,

I set up a Nationwide eSavings account a few years ago and to begin with the rates were quite good, somewhere around 5%.

I set this up as I had a FlexAccount there and also I wanted easy access as I was buying a house and may have needed access to the cash.

Since then I have bought the house (I still owe 90% to the bank).

The savings rate has dropped to 0.45% !!! I got paid interest today of less than £100 and I have just over £20k in the account. This is not good and I realise I need to move my money to make it work for me.

Some advice please on to what I should do. I guess I would like to have advice on how much I should move and where. I would like to have access to it should I really need it but am hoping I can lock it away without touching it to achieve maximum returns.

Please help a clueless monkey!

CLAPTON

Put 5100 into an ISA (too late for this year ) ... althoguh not great the Nationwide eISA (not the ordinary ISA) pays 2.75% which isn't too bad and is instant access if you find you need the money.
If you have a wife / OH then consider her doing the same.

Otherwise simply move it to the best saving a/c you can find that meets your needs... i.e. online, branch based etc.

EalingSaver

If you want it in cash, find a better savings account !! Start on this site with the best buys, not the forum. If a taxpayer, consider an ISA (but look for good rates, AND MONITOR THEM).

If some of it is considered 'spare' then assuming your mortgage allows consider paying some of that off: unless you are on a fantastic mortgage rate and you think you can get more out of savings interest (- tax) than you are paying on the mortgage.

rb10

First, do get as much as you can into an ISA. If you can open one by 5th April, then you'll be able to get £5100 in now (e.g. Barclays 3.1% or Halifax 2.6%). (I don't know if there's time to open the Barclays one before 5th April, but the Halifax online application is fully automatic and they should be able to verify your identity electronically, so shouldn't take long). You can then add £5100 on or after 6th April.

As for the rest, I'd go for either 2.8% from the AA or 3% (with current account) from Halifax.

clueless_money_monkey

Any tips on what is the best ISA to go for? Or are they all the same pretty much? Also, one of previous posters said it's too later for this year?

cloud_dog

Clueless..... First of all what interest are you paying on your mortgage?

Some mortgages allow overpayments, certainly most Nationwide mortgages (including fixed rate etc) allow up to £500pm overpayments which (importantly) can be drawn against should you need the cash.

Depending on your mortgage rate you may be quids in by overpaying the mortgage and reducing the interest cost of the mortgage rather than actually saving. As I said any overpayments can be withdrawn if you require the cash.