A Good Savings Account - Help.

SparciaM

At the moment, I really can't afford to put money away to save (as I'm trying to reduce my debts), but I'd like to put between £10 - £20 a month away for a rainy day. Anyone know a good account with high interest that I can just leave in.

I do have an ISA at 4.75%with smile, so don't know if should just stay with ISA or go for something else.

mleonard79

If you haven't used up your whole ISA allowance for the year and you pay tax then paying into an ISA will be your best option (other than getting regular savers but this means tying your money up and if it's rainy day money then that's not a good idea!)

There are better rates out there than the Smile 4.75% rate though - the NS&I one recommended by martin on his thread HERE pays 5.3%. If you wanted to go for that one though make sure you transfer your ISA and don't just take your money out the Smile one and open up the NS&I one as as soon as you take money out an ISA you can't replace it. It's quite simple to transfer it though - you just fill out a form. If you don't want the hassle of transferring then the ISA you've got is not the worse rate going either.

Other than that if it's just an instance access savings account you're looking for then the best payers are the new Icesave one at 5.2% or ICICI's 5.15%. Remember you pay tax on these though so they're not as good as the ISA.

Regards

Michelle

ReportInvestor

You would need £250 to open IceSave.

I agree with Michelle that if you are a taxpayer then the ISA route is probably the way to go.

The top paying regular savers tend to allow access on closure or with loss of interest.

Yorkshire BS Regular Saver @ 6.5% gross might suit, as you are allowed 1 withdrawal pa. 2 withdrawals and the interest rate slips to 3% - as it does if you don't make 11/12 payments pa. It starts from £10 pm and, unlike some others, can continue after year 1.

Cypher

I agree with RI & Michelle on the ISA but the The Lloyds TSB monthly saver pays 8% AER fixed for 2 years and has no penalties for withdrawals so this could also be a good option to look at.

You need a Lloyds TSB current account to open it, but the standing order to top up the account seems to be able to come from anywhere.

It allows instant access to your money with no penalties, you can make as many withdrawals as you like but these withdrawal have to go to your Lloyds TSB current account.

You are only allowed 1 payment into it per month but you could do this at the end of a month and sweep off what you can afford. Ideally I would do it at the begining of a month and pay what you can afford (see below for minimum)

Monthly payments are variable between £25 and £250. I know this takes you over your £10-20 per month limit, but with the penalty free withdrawals you can always pay in £25 and then later withdraw the £15 if you needed it. That way you always statisfy the terms of the account.

It pays 8% AER fixed for 2 years which makes it a good account. (6.40 % Nett for a basic rate tax payer) If your not a tax payer then fill in an R85 form to have the interest paid Gross. If your a higher rate Tax payer then an ISA would be a better option.

If you can afford to save £3000 per year, every year then using you ISA allowance each year would be a must. I know personnally this level of saving is beyond me, so I know year on year I won't be able to use up my ISA allocation. So using the regular saver to save makes sense as it beats the ISA interest rate short term. I would later move it into an ISA to get the Tax breaks for future years.

gelato_cat

You can't transfer into that one - NS&I have two - you can only transfer into the one which pays 4.45%.

http://www.nsandi.com/products/isas/from_isa.jsp

Suze

mleonard79 wrote:

There are better rates out there than the Smile 4.75% rate though - the NS&I one recommended by martin on his thread HERE pays 5.3%. If you wanted to go for that one though make sure you transfer your ISA and don't just take your money out the Smile one and open up the NS&I one as as soon as you take money out an ISA you can't replace it. It's quite simple to transfer it though - you just fill out a form.

gelato_cat

Hi

You might be better off putting the extra money into paying off the debts, as the interest you'd earn would be less than what you are paying to your creditors - even if you had an ISA, because one of your debts has an interest rate of over 7%.

If you got one of the high-interest regular savers it would be a different matter, but many of these require a higher minimum deposit than you plan to put away (usually a minimum of £25/month).

HTH

Suze

SparciaM wrote:

At the moment, I really can't afford to put money away to save (as I'm trying to reduce my debts), but I'd like to put between £10 - £20 a month away for a rainy day. Anyone know a good account with high interest that I can just leave in.

I do have an ISA at 4.75%with smile, so don't know if should just stay with ISA or go for something else.