£500 month saver help

monkeys_bunny

Hey guys

im not sure if this is in the correct place but i am sure you will point me in the right direction if it isn’t. I have looked through the MSE banks/savings tab but just came out more confused.

I am very very bad with math and basic money sense. im not an over spender, don’t have a credit card and never go into my overdraft but I basically don't understand numbers enough to get my head round money. if that makes sense, and thus why I need your ‘dummies guide’ and any help you can offer.

Anyway, I will have a maximum of £500 a month to put away as savings (trying to pay off mortgage at some point) but I may need to dip into it from time to time if the worse comes to the worst. I don't really like using banks etc that I have not heard of and neither do I ‘like’ Halifax (but am willing to set my feelings aside if really needed), so my question is:-

Where is the best place to save to gain the best interest and return on my money in these circumstances?

Thank you for any help you can provide.

Bunny

Lokolo

How about you start off with something like this:

http://www.postoffice.co.uk/portal/po/content1?catId=19300232&mediaId=126000768

Instant access (obviously online will take 3 days to transfer out).

Fedz

1st rule of saving is ISA (tax free savings) if you don't already have one - look in that direction

monkeys_bunny

Lokolo wrote: »

How about you start off with something like this:

http://www.postoffice.co.uk/portal/po/content1?catId=19300232&mediaId=126000768

Instant access (obviously online will take 3 days to transfer out).

i did look at this as mum said post office is good, only thing i dont get is how you put cash into it. do you have to put it into another bank and then transfer it over, or can you go into the post office like a normal bank?

Fedz wrote: »

1st rule of saving is ISA (tax free savings) if you don't already have one - look in that direction

i thought ISA would be the best way i looked on compare site as Martin suggested but i really just dont get it. I just would like a 'dummies' answer of which is the best place to get one from.

Loughton_Monkey

monkeys_bunny wrote: »

i did look at this as mum said post office is good, only thing i dont get is how you put cash into it. do you have to put it into another bank and then transfer it over, or can you go into the post office like a normal bank?

This is an 'Online Saver' account. Most of the higher interest accounts like this are only done via Internet Banking. But I assume you must have an ordinary current account already, where you pay in cash. If not done already, simply get access to that account online, and you will be able to transfer to/from your main bank and go on from there.

monkeys_bunny wrote: »

i thought ISA would be the best way i looked on compare site as Martin suggested but i really just dont get it. I just would like a 'dummies' answer of which is the best place to get one from.

Just remember the term "Cash ISA". Every one of us is allowed to invest up to £5,100 a year into a Cash ISA. In practice, it is very much the same as any other savings account, except that the interest rolls up tax free.

Again, the best deals are usually on the Internet, and don't accept 'cash' payments. They are generally not meant to be used to keep taking money out. Putting £500 in one month, and withdrawing it again the next has gained you one month's 'tax free' interest, but will have used up £500 of your yearly allowance.

As to the best place, I can only refer you to the main site (or perhaps the usual comparison sites) to find one with the best rates, but check their 'small print' to ensure you understand how it works, especially in the case of ISA withdrawals. [Some of the good savings accounts, for instance, only pay good interest if you do not make too many withdrawals].

Fedz

According to Martin the Halifax ISA Direct Reward is the best at 2.80 AER plus you can signip online.

You just transfer money to it from your bank account or use telephone banking & or in branch plus this has no penalty unlimited withdrawals

I'm with Nationwide so have one with them at 2.50 AER but, you can choose who like

They're very easy to use & maintain

psychic_teabag

Fedz wrote: »

1st rule of saving is ISA (tax free savings) if you don't already have one - look in that direction

That's generally true, but does assume the OP pays tax - otherwise, can get a better rate elsewhere. And even for a basic rate taxpayer, 4% taxable interest is better than the best current ISAs. if you can get over the 5k threshold, a Lloyds vantage account gets you get 4% (taxable) interest. Or regular saver accounts tend to give higher (taxable) interest. They tend to limit access, though.

You said you don't like halifax, but if you get one of their current accounts, you can move your £500 in and out a couple of times, and they'll give you £5 (net) per month. Then you can then immediately move the money out to somewhere else. Even better, doing this would qualify you for an ISA at 3% with them.

Fedz

psychic_teabag wrote: »

That's generally true, but does assume the OP pays tax - otherwise, can get a better rate elsewhere. And even for a basic rate taxpayer, 4% taxable interest is better than the best current ISAs. if you can get over the 5k threshold, a Lloyds vantage account gets you get 4% (taxable) interest. Or regular saver accounts tend to give higher (taxable) interest. They tend to limit access, though.

You said you don't like halifax, but if you get one of their current accounts, you can move your £500 in and out a couple of times, and they'll give you £5 (net) per month. Then you can then immediately move the money out to somewhere else. Even better, doing this would qualify you for an ISA at 3% with them.

That's very good advice :T

Lokolo

The Lloyds account also requires £1k in each month, so the OP would need to do the same as Halifax.

monkeys_bunny

Thank you guys, just moved house so could not get on web until at work

shall look into these & maybe go talk to the banks in question

Thank you