Saved some money, unsure what to do?

tom-i

Evening, this is my first post so I'd like to say Hello!

I'm after some advice regarding my finances as I'm unsure what route to go down.

I'm currently earning £1100 a month which goes into my Lloyds TSB Silver Current Account which I've just upgraded to a Vantage account after reading some posts on here. I would say that at the moment I am able to put about half of this away as Savings.

Over the past year or two (since I started working full time) I have managed to save £6000 - £3000 in premium bonds, £2000 in my Current account and £1000 tied up in a car which will be sold soon, hopefully for a small profit.

Now I am unsure as to what to do with this money, I will quite happily take the money out of my premium bonds if need be as I havnt won a single penny in the past year. But unless there's a good account out there for my money then I'll keep it in bonds. I'm not too keen on keeping my money locked up for a few years, now I'm 21 I don't know if it will be needed in the next year for whatever (moving out, etc.).

I'm not too clued up on ISA's, I understand I have until the end of March to use up this years quota. Is there any point filling it up now? Or should I find a Savings Account with a high interest? I've seen Santander do a First Home Owner account, with 5% interest which caught my eye.

Any help appreciated, thanks.

Lokolo

The Home Saver is very good. You can put in £300 a month after putting an initial deposit of upto £5,000.

If I were you. I would open up this account with £5,000. Use the other £1,000 to deposit into Lloyds Reward (and try and get that upto £4,000 to earn the 4%). At the same time putting £300 a month into the Home Saver.

tom-i

Hi, thanks for replying. Where can I find this Lloyds Reward account? A quick google search and browse on their website and I can't seem to find anything about it.

Lokolo

Sorry its Vantage

http://www.lloydstsb.com/current_accounts/vantage.asp

you can earn up to 4.00% AER on your whole balance if you keep between £5,000 and £7,000 in your account and meet the Vantage

tom-i

Ah yes, just upgraded to that. Seems like a good hassle-free way of getting some interest. Many thanks,

Newbie2saving

Think Lokolo means the Vantage account (sorry if I am wrong!) which you have, but the 4% is only paid on balances between 5-7K, so pop your cash in here and transfer 1k through every month to receive the high interest rate. Also use the Santander account you mention, 5% is great, deposit 5K and then add as and when you can. Seems as though you've got it covered apart from the premium bonds, to me they aren't worth missing out on the interest for unless you have lots of spare cash to play with. Think of the money they could have made you over the past year and in future, although some people are lucky, I would be happier of the certainty. If you pulled this money you could fund both the Vantage and the Homesaver and get the most from your hard earned cash.

Start an ISA this coming tax year with the best avail rate, tax free so a bonus there, but both the accounts discussed above have better rates so look after those primarily. Although interest rates aren't great at the moment, in future when they have risen this tax free pot can be underestimated.

All the best.

tom-i

With the Vantage account, will I only get interest on whats in the account at a certain date in the month?

For example, getting paid £1100 at the end of the month, but only about half of this will stay in the account as saving, and the other half will be spent. If interest is paid just before I get paid, I will have only saved about another £500 on top of whats already in there.

So going by this I should have £5000 in the account within 10 months.

Loughton_Monkey

Although you are only 21, you should be thinking about pensions. The power of compounding means that the younger you start, the better it is.

If that is not suitable, then maintaining £5,000+ in your Lloyds Vantage account is an excellent way to earn interest. It beats most 'savings' accounts but just never fall foul of the £5K minimum.

Premium bonds are, quite frankly, a bit of a mug's game. Far better to 'save' your money properly and have the odd lottery punt on rollover days if you fancy being a millionnaire overnight. Even if you had £50,000 in Premium bonds, you stand more chance of dying each month than you do winning a 'big one'.

Eco_Miser

tom-i wrote: »

With the Vantage account, will I only get interest on whats in the account at a certain date in the month?

The interest is calculated on the closing balance each day, at 1/365th of the annual rate, but added to the account once a month, usually on the 1st of the calandar month, which is the last day of the accounting month (for most accounts), so it pays to delay withdrawals for as long as is reasonable.

Remember, you only get the top rate with £5k-£7k, though 3% AER is reasonable on £3k,

tom-i

Thanks for clearing that up, all makes sense now! :beer: