First Savings Account...

PhilL_3

Hi there..

I was after some saving advice; I have just managed to reach the point with my finances where I am debt free :j and looking to put away approx £300 from my salary per month (for the time being, looking to increase this in line with salary increases). Obviously I want to make my savings work the best for me so at this level would I be best off putting the first savings into a mini cash ISA?

Any advice appreciated

DawnW

YES, but first see the information on savings and investments on this site (the savings fountain bit is good).

PhilL_3

Yeah I've read all that but as a basic tax payer would I not be better off with a Lloyds TSB Monthly Saver at 8% for two years and paying tax on the interest than drip feeding an ISA at around 5.2%?? Or even an Alliance & Leicester Premier Regular Saver at 12% for a year? Or am I missing something?

DawnW

Isn't it the case that you need to have/open a current account with these in order to open a regular saver (you certainly do with A&L, as I have one)? You didn't mention that you wanted to do this? By the way, Britannia have a new 7.5% 1 year regular saver where you don't have to have a current account with them. You can save up to £250 each month. You do the sums, I guess. It also depends on the hassle factor, how much effort you are prepared to put in. These regular saver accounts tend to pay the balance into a poorly paying account once they mature, so need to be on the ball and get it out / move it quick. 5.2 is a bit low for a decent ISA BTW. I have seen them higher, at Portman and NS&I (Post Office?) recently. I have both types of account in fairness, haven't been forced to choose between them.

PhilL_3

Thanks for the reply.

I was thinking of opening a current account with them actually as their current account seems quite an attractive proposition as well.

I used 5.2% as an ISA example as I haven't got £1000 to put in as an initial investment, otherwise the NS&I ISA would look most attractive. It just strikes me that the interest accrued using one of these would beat an ISA if you were prepared to move the cash out after the honeymoon period, and into another account.

Maybe as you say it's the hassle factor, and they bargain on people being lazy and not mving their money after the initial period?