Savings help needed

leon103

Hello Everyone.

Need some advice on the savings front.

My OH and I are looking to open an savings account so we can put away a little each month to go towards an house deposit.

Everyone I see advertised requires you to make monthly deposits of £1000 for over.

What does everyone suggest we do?

What are the best accounts out there?

Sorry for such a stupid question.

Cypher

Most regular savers require much less than £1000 per month. If fact most limit you to a maximum of £250 a month.

Some have fixed regular amounts, others are variable. My personal favourite is the Lloyds TSB 8% fixed for 2 years with variable payments and no penalty withdrawals. The only restriction's are a max £250 per month and only one payment in per month.

leon103

Cypher wrote:

Most regular savers require much less than £1000 per month. If fact most limit you to a maximum of £250 a month.

Some have fixed regular amounts, others are variable. My personal favourite is the Lloyds TSB 8% fixed for 2 years with variable payments and no penalty withdrawals. The only restriction's are a max £250 per month and only one payment in per month.

That sounds good.

The ones I had seen were Halifax and A&L which both say you have to pay in over £1000 a month. So its a regular saving account that I need.....

Riviera_Kid

http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1108401263,93536,

The above page gives you more detail on regular savers.

Some regular savers have strict conditions so make sure you only go for the ones that suit you - e.g if you might need the money within a year make sure you choose one which allows withdrawals

Cypher

I think the £1000 you mentioned is probably talking about the current accounts that are used to feed the regular saver.

I have the Lloyds TSB Regular Saver which to open required a LTSB current account, It didn't need to have any money paid into the current account though. All you need is a current account, I went for the basic current account which had no minimum incoming restrictions.

The TSB account is 8% over two years, others to look at are the 10% 12% payers which are only 1 year accounts, this doesn't work out as good as the TSB one, all money paid into the TSB account in year one will gain the full 8% in year 2 which brings it out slightly on top.

Bear in mind with regular savers that due to the drip feed nature of paying the money into the account over the year, the AER% will be paid on the average balance in the account over the year, not the total.

So if you pay in £100 a month = 1200 per year the AER% will be paid on approx £600.

If you have a lump sum to save consider an ISA you can get 5+% tax free whereas with the regular savers you will have to pay Tax (assuming your a tax payer get an R85 form if not) With the 10% regular savers account, due to the average balance mentioned above actually works out around 5% after tax your down to 4% so the ISA shouldn't be ignored.

You can put £3000 each into a mini Cash ISA each financial year.

leon103

Cypher wrote:

I think the £1000 you mentioned is probably talking about the current accounts that are used to feed the regular saver.

I have the Lloyds TSB Regular Saver which to open required a LTSB current account, It didn't need to have any money paid into the current account though. All you need is a current account, I went for the basic current account which had no minimum incoming restrictions.

The TSB account is 8% over two years, others to look at are the 10% 12% payers which are only 1 year accounts, this doesn't work out as good as the TSB one, all money paid into the TSB account in year one will gain the full 8% in year 2 which brings it out slightly on top.

Bear in mind with regular savers that due to the drip feed nature of paying the money into the account over the year, the AER% will be paid on the average balance in the account over the year, not the total.

So if you pay in £100 a month = 1200 per year the AER% will be paid on approx £600.

If you have a lump sum to save consider an ISA you can get 5+% tax free whereas with the regular savers you will have to pay Tax (assuming your a tax payer get an R85 form if not) With the 10% regular savers account, due to the average balance mentioned above actually works out around 5% after tax your down to 4% so the ISA shouldn't be ignored.

You can put £3000 each into a mini Cash ISA each financial year.

Thanks for the informative post.

An ISA is something I need to look into. I haven't got a lump sum yet but both myself and my OH are waiting on back pay from our employers and my OH is waiting on bank charges to come through. This will fill an ISA up nicely.

DawnW

You don't need to 'fill up' an ISA all at once, (with a few exceptions), but can usually pay in and get out whenever you like, up to £3000 each per financial year.

leon103

DawnW wrote:

You don't need to 'fill up' an ISA all at once, (with a few exceptions), but can usually pay in and get out whenever you like, up to £3000 each per financial year.

Ok thanks. I guess this might be the best one for us. Thanks. I will check out the ISA board for more detail

ReportInvestor

But don't forget you can't put back into a £2006/7 Cash ISA what you have taken out.

The money paid in is limited to £3K per tax year - not just the pre-interest balance.

leon103

ReportInvestor wrote:

But don't forget you can't put back into a £2006/7 Cash ISA what you have taken out.

The money paid in is limited to £3K per tax year - not just the pre-interest balance.

Thanks. Just been reading up on that now.