whats my best option?

Bilo

Hi there. I am looking to open a new savings account. i will be depositing 500 initially when i open it and puting in around 800 a month for 10 months.

I have been looking on the site for best ISA return but does it really matter due to the amount i'm puting in and the timescale.

any advice?

dunstonh

What is the timescale? (you only mention the period you are paying in. Not the period you expect the money to be there for)

What is your tax rate?

Spiggle

Bilo wrote: »

Hi there. I am looking to open a new savings account. i will be depositing 500 initially when i open it and puting in around 800 a month for 10 months.

I have been looking on the site for best ISA return but does it really matter due to the amount i'm puting in and the timescale.

any advice?

Have a look at this thread Bilo https://forums.moneysavingexpert.com/discussion/401374

It always is best to seek the best rate. As you are paying in over the term you will need to look at the variable rate ISA on the list linked above as they should not have any restrictions on paying in throughout the year.

Hope that helps,
Spigs

psychic_teabag

In the short-term, an ISA may not be the best option, assuming you are a basic-rate taxpayer. eg a MonmouthshireBS flexible saver is 4% taxable (so 3.2% after basic-rate tax). There are some instant-access ISAs that can beat this, but they require £1000 or more initially. There are other regular saver accounts offering higher rates, but come with more restrictions.

But you'd want to transfer it to an ISA before the end of the financial year to lock in your annual ISA allowance.

If you happen to live near Nottingham, I think the Notts BS has a regular-saver ISA offering 5%. Not sure how flexible it is over deposits and withdrawals.

Bilo

i'm paying that in for around 9-10 months then will be withdrawing and supplementing with more to put a deposit down on a house.
I was just going to open a basic savings account with my bank and put the money in each month then withdraw at the point i need to. I'm just unsure what type of account would be the best for me to save the money

Bilo

thanks Spigs
so by my understanding, i can open an isa to save my money but once i save over £5,640 i will be taxed. is that right?? sorry i'm just slightly confused and really just looking for the best way for me to save that amount of money without it being affected. am i better to just even put it into my own current account each month?

psychic_teabag

You can't put more than £5640 into an ISA. So once you reach that, you'd have to save additional money in a taxable account elsewhere.

How much effort are you prepared to expend to earn some interest ? You could stick the money in your current account which is no effort, but will (probably) earn no interest. With a little more effort, you could open a savings account with your bank and earn a little interest. With a bit more, you could open a market-leading instant-access account elsewhere and get around 3%.

You could use an ISA, which will allow the interest to be earned tax-free. That's a little more effort, since there are a few additional rules you need to be aware of.

Or you could make more effort still and look into such things as regular-savings accounts, which may be a bit more interest, but have more restrictions.

To put estimates on the reward: You could very roughly £100 of interest (3% of an average of roughly £4000 balance for 10 months) with some effort, or probably around £20 if you just go with a savings account at your bank.

Bilo

Psychic teabag - thanks for taking the time to reply and for your information. its much clearer to me now