Savings Advice

psychic_teabag

SDM85 wrote: »

Having done a few calculations, I would make more interest with the Post Office Fixed 3 year term at 4% than the Santander First Home Saver, depositing £300 a month at 5%.

For 3 years, a quick sum suggests it might be very slightly better to go for the Coventry 5-year at 4.75% and pay the 180 day "fine" for early withdrawal, than 3 years at 4%. But that assumes the fine is taken from pending interest (and so before tax has been deducted). If the gross amount is taken from net interest, that would hurt more (assuming you are a taxpayer).

However, http://www.!!!!!!.uk/free-services/best-buy-savings-accounts/fixed-rate-bonds-approx-3-years/ lists five 3-year-fixes paying more than 4%, and I think they'd beat the Coventry 5-year.

If 3 years is a safe underestimate for how soon you'll need the money, any extra time in the 5-year account would be a bonus.

SDM85

aaronmanz wrote: »

However, as Psychic Teabag said, you can deposit the rest of the lump sum in the second month, so all you would get is an interest penalty of only 0.1% paid for that month but you'd then have all your money in that account and be earning 5% AER thereafter :j

Would they allow that?

SDM85

aaronmanz wrote: »

However, as Psychic Teabag said, you can deposit the rest of the lump sum in the second month, so all you would get is an interest penalty of only 0.1% paid for that month but you'd then have all your money in that account and be earning 5% AER thereafter :j

With the Santander First Home Buyer savings account, if I deposit the initial £5k, then in the second month I deposited the rest of the lump sum I am due to inherit, am I correct in thinking I would then need to deposit £100-£300 each month in order to receive the 5% interest?

xrjtg

Yes, so you need to bear that in mind when deciding how much to deposit up front.

King_Weasel

You can get 4% with Lloyds Vantage on £21000 - 3 accounts allowed with max of £7000 in each. You need to pay in £1000/month as well but it doesn't have to stay there, so basically it just rotates.