Account with minimum limit before withdrawl?

Monstrous

Hi, first time poster, be kind! Seems like the right forum, but we'll see... I'm 20 right now and want to start saving cash for buying a house. However, I'm very prone to being a spender.

Is there such a thing as a savings (or other type) of bank account where I could tell the bank a limit, before I could touch the money in it? Example, I set the limit at 100,000 - I can't take anything out of it until it has that amount in it, at least. If so, which banks would be able to help me out?

If the money was untouchable, I'd be much more inclined to save it!

Thanks,
Darren

opinions4u

Santander and Lloyds TSB offer term deposit accounts that allow no withdrawals until maturity.

But maturity is the key here. You're not a kid anymore. Time to learn the discipline that is needed to grow savings.

If you want to, you'll do it.

calypso_rhapsody

What an interesting product idea - though not sure how popular they would be!

There are lots of fixed term deposit accounts that do not allow withdrawals until maturity (and terms typically range up to 5 yrs) - not just the two that opinions4u mentions. You could use these but you'd have to be disciplined when they matured to make sure you did not spend it then. Typically these products have minimum amount that can be deposited of £500 or £1000 - sometimes more. So you could open a whole range of these over time to build up to your savings target - but it might become a bit of a management nightmare.

Could you find other ways to increase your self-discipline? There are lots of savings logs on this site - maybe if you joined in one of those threads and kept track of your progress against your target you might find it easier to resist temptation? Eg there's a newish thread about saving £12k in 2012 ....

psychic_teabag

There are notice accounts which require 1, 2, or 3 months notice before a withdrawal can be made. That might be sufficient disincentive. Or maybe just a postal account, where you have send a form in the post to ask for a cheque (or something - not quite sure of exactly how they work).

A branch account in a town a long way away, so that you'd need to make a long trip to withdraw money.

But you'd need some easy way to pay money in, of course.

ermine

If the money was untouchable, I'd be much more inclined to save it!

Take control of your own life. If this saving is a big enough priority for you, you'll do it. If it isn't, then it's not important enough to you.

Only when you live your life by your own lights and accept responsibility for your own actions will you become master of your destiny. Until recently your life has been guided by others, but it's time to cast off the stabiliser wheels and plot your own course.

FWIW saving £100,000 is a strange thing to want to do at 20. Not a bad thing, just a strange thing. If you want to buy a house, what sort of house? In what area? What are the prices of such houses? 20% of the purchase price is a good start for a deposit. That's more like 20-40k for a starter home.

However, I'm very prone to being a spender.

Fix this first. Something like the book Your Money or your life will educate you to what the cost of being a spender is. Basically it is debt slavery, reduced options and being owned by the Man for the sake of short-term satisfaction. As long as the benefits outweigh the costs, carry on being a spender. But you owe it to yourself to examine what the costs are, and you are at the best time of life to choose which way you go

Tuesday_Tenor

If you haven't started saving yet (or even if you have!) take a look at the MSE guide to learn about the different sorts of savings accounts available:

http://www.moneysavingexpert.com/savings/

There are various ways to build in actual or psychological/de-motivational barriers to taking your money out.

Start with an ISA, where the interest earned is tax-free. You can only pay in up to £5340 in the year to your ISA. Once you've built up your £5340 that's it for the year. Though (in most cases) you CAN take your money out (e.g. in an emergency) YOU CAN'T PUT IT BACK IN AGAIN during the same year, so you'd 'lose' that tax-free element if you did. So withdrawing it for frivolous reasons is foolish, as it would otherwise have gone on to earn more tax-free interest next year, the year after that, and so on.

Then you can find accounts which need notice (1 month, 3 months ...).

Or accounts which only allow 4 withdrawals a year.

As you save more you can lock some away for 1,2,3 years at a time in fixed accounts (often called bonds) which give a better rate of interest in return for you not wanting access.

Don't tie up ALL your money where you can't get at it. Many 'tied-up' accounts won't allow ANY access. Those that do will have penalties, so you'd lose money and be kicking yourself if you have to break into them. Work out what you need during the year for irregular big purchases and emergencies. Beyond that buffer though, make it as difficult as you can to get your hands on the majority of it!

HTH. Good luck.

calypso_rhapsody

Tuesday - i think you've got the ISA limit wrong - £5,340 i think - just a transposition error but quite a large difference!

Monstrous Darren - no reply - have we been too harsh?

Tuesday_Tenor

calypso_rhapsody wrote: »

Tuesday - i think you've got the ISA limit wrong - £5,340 i think - just a transposition error but quite a large difference!

Oops! Yes, £5340 of course! Sorry, senior moment; obviously a long-lived one, as it continued as I read post through! Have corrected post, and sorry for causing confusion!