Savings advice - I know nothing!

Anarchist

Hey all,

Just after a bit of quick guidance - I'm not expecting to be spoon fed (unless you're really bored!), but some general advice would be good with links to where I can find out more.

Up till January this year, I've always been in debt (thanks to an ex running up £15k of debt, and me finally having paid off every last penny, in January! :beer:). And since then I've been saving like a beast. Plus I sold my car last month, as I don't need it. I have a van for work and I'm happy to live without a car for personal use.

My plan is, to save up enough money for a house deposit by the renewal of my apartment tennancy agreement, in October 2013. I'm currently sat here with £10k saved, just sat in my current account doing absolutely nothing (after a few good months overtime this year) and as things are looking fairly good this/next year, I'm hoping to have saved £20-25k by next October. I should, barring disasters, be able to save £20k with ease so I'm not stretching things with that target.

Can somebody please give me a clue, on what would be the best thing to do with this £10k, and the rest I save? Or any other advice, as mentioned, actually having a + sign in my bank account is a strange phenomenon to me - it has never happened before since I was 18! :rotfl:

DiggerUK

There will be plenty of advice coming your way, and plenty is already available for you to read; both here and elsewhere.

Keep up on all the news, especially political and financial. The time you spend keeping up to speed on current affairs wil reap dividends.

In the here and now....just get used to having some spare.
I have to tell you it isn't quite the fortune you see it as, as you will need a good 20% of purchase price to get a fair deal on a property.

But the best of fortune to you.
..._

FLAPJACK

Hi there,

You could open 2 lloyds TSB current accounts with Vantage and put 5k in each which will earn you 3% gross (roughly £10 a month each).
The maximum you can have in these accounts is 5k over that they don't pay interest.
just have to take 1k out of one and put it inthe other and vice versa once a month....you have access at all times to your money.

Some fixed rate bonds pay 3% if you put it away for a year and can't touch it, so the Vantage accounts are not a bad deal....infact you can have 3 so fill up 2 and add monthly to the 3rd using the interest from the 2 others and any spare cash.

Or you could put 5640 in a cash isa.....that way there is no tax on the interest..although if you take some out you can't put it back.

Anarchist

Cheers Digger,

The 20% figure is what I already had in mind, and how I've got to needing to save around £20-£25k (decent houses around here are around £90-£110k).

I'm doing a bit of reading up (inbetween jobs!) but there is that much info everywhere, and it changes so quickly, that finding out where to start with the relevant basics is a bit of a challenge.

Leaving the money in there is not a problem, I have no plans that will need it until I get my house, so I'm happy to leave it there for a year.

Anarchist

Is it worth me looking at moving to first direct?

I'm with HSBC at the moment, but my monthly wage is above what First Direct ask to be paid in every month. Plus their regular savings account quotes up to 8%? Is there any big clause in this?

MoneySaverLog

FLAPJACK wrote: »

Some fixed rate bonds pay 3% if you put it away for a year and can't touch it, so the Vantage accounts are not a bad deal....infact you can have 3 so fill up 2 and add monthly to the 3rd using the interest from the 2 others and any spare cash.

Lloyds do a tracker bond which I've been looking at, pays 2.75% above Bank of England Base Rate 0.5% (again, when is it going to go back up!!!) :mad: so you'd get 3.25% here.

FLAPJACK wrote: »

Or you could put 5640 in a cash isa.....that way there is no tax on the interest..although if you take some out you can't put it back.

That's what I'd do. £10K pays 3.7% but you'd have to be able to transfer in with Lloyds as limit this year is £5,640

Anarchist wrote: »

Is it worth me looking at moving to first direct?

I'm with HSBC at the moment, but my monthly wage is above what First Direct ask to be paid in every month. Plus their regular savings account quotes up to 8%? Is there any big clause in this?

Yes, the catch is you can only put in £300 a month max and have to build up the savings, if that's what you mean. Still a good way to save for next years cash ISA.

innovate

The FD Regular Saver pays a basic rate tax payer about £124 after 12 months of depositing £300/mth. That's about 3.4%, which is almost more than you'd get on a lumpsum of £3.6K over a year - - so definitely worth it. No need to move all your banking to them - but you might be able to bag an account opening bonus (not sure they pay you that if you come from HSBC) if you do. You don't need to do all your banking with FD in order to be able to use the Regular Saver.

If you do move your banking, consider Lloyds or Santander, who pay interest on current accounts. Santander also pay cashback on certain Direct Debits on their 1-2-3 account. Depends very much how big your bills are but combined with their 1-2-3 credit card (free for 1 year, then chargeable, if you continue using it) you could probably make £100-£200 in cashback w/o much effort. Talking about cashback, TCB used to pay £50 for opening a Santander 1-2-3 account, not usre whether it's still there.

Definitely consider putting £5,640 of your money into a good instant access ISA, or may be even into a 1-year fix ISA, asap. Even if you do not keep that ISA for very long, it's the best place for interest now.

Syphon off any other money you can save into a good instant access savings account. Post Office at 3.17% seems to be tops atm.

Reaper

innovate wrote: »

If you do move your banking, consider Lloyds or Santander, who pay interest on current accounts.

Just check the maximums if you do this. I don't know about the Lloyds one but I have the Santander 1-2-3 account which pays 3% interest up to £20,000 but nothing above that. However if you are also taking out a cash ISA as advised above it will be a while before you have to worry about that.

Note that Santander have a poor reputation for customer service, though I have not had any problems myself, touch wood.

innovate

Yeah, there are limits. Lloyds is £5K max, but you can have at least two of them.

I was leaving it to Anarchist to figure that out because he said he doesn't need to be spoonfed :cool:

Anarchist

Cheers guys, actually seeing £ figures rather than % figures makes things a little easier!

At this moment, I'm looking at Santanders 1-2-3 account, and Santanders 1 year fixed ISA @ 3.5%. It seems to me like it will be the easiest option by far (assuming I don't get stung by their service...) and I'll only be losing out on a tiny bit of interest from having the rest of my cash in the current account instead of a savings account. Which I'd probably make back from the cashback on bills anyway (though my bills are quite small).

What do you reckon?

Or, I may be tempted to see if FD will give me the £100 account opening bonus, and open both a FD/regular saver and a santander 123 account. Keep any excess balance and pay cashback qualifying bills from my 123 account, and use the FD account for the rest/filling a regular savings account.

MoneySaverLog

innovate wrote: »

Yeah, there are limits. Lloyds is £5K max, but you can have at least two of them.

You can have up to 3 classic accounts with vantage added to them.