Where to save next

dougle_turbo

Hi,

I finally sorted my money priorities out in April and as a result I'm now saving about £1500-£1800 per month. This month I filled my Virgin Cash ISA and I'm trying to work out where to put the money next. I had been thinking about using the shares part of my allowance, but not really sure.

The aim on the saving is to put a house deposit together-and hoping to buy in the next 18-24 months

Thanks

CLAPTON

shares aren't really suitable for money needed in the short term

Yorkie1

If you want to maximise interest rates it can get messy but doable.

First Direct has a regular saver at 8% into which you can put £300 per month. You only get the 8% at the end of 12 months, so if you withdraw part-way through the year you'll lose the decent interest rate. Perhaps worth it for 12 months.

You have to open their current account (called 1st Account) from which the standing order to the regular account is paid and, in order to avoid the monthly funding requirements into the 1st Account, you also open up an e-saver with £1.

Lloyds TSB have got a good offer on Vantage accounts, which are their upgraded (free) current accounts. You can have as much as you like in the account, but balances between £3K - £5K carry 3% interest, or 4% [edit: between £5K - £6K] if you register the account for this extra amount and have 2 direct debits set up on the account. Balances over £5K [edit: if you don't register, or over £6K if you do] don't carry interest;. You can have up to 3 accounts.

Edit: The alternative is to look for a standard savings account which offers a nearly-decent rate of interest, and just put everything in there, to keep it together and make it most simple. There's a post on here somewhere on the best savings rates available - I can't see it at the moment, hopefully someone else has the link.

Midzone

Not quite correct Yorkie1 - the Vantage account offers 4% on balances over £5000 up to £6000 up until 31st October 2013.

No interest is paid above £6000.

MoneySaverLog

As well as the First Direct Regular saver paying 8% you might like to consider another regular saver, then moving the funds over to next years ISA.

Depending on the time frame of when you're looking to buy will open up more options with fixed rates.

Nationwide do a good flexclusive regular saver if you have been with them for 3 months (paying in £750 a month or more) or have your main bank with them.

Also the Vantage accounts are a good place to horde the cash at up to 4% for a balance of 5-6K, again more hoops paying in and out £1,000 a month and setting up 2 Tesco DD's

Then of cause you can pick up a free fiver by putting in and taking out £1,000 a month in a Halifax Reward account.

Yorkie1

Midzone wrote: »

Not quite correct Yorkie1 - the Vantage account offers 4% on balances over £5000 up to £6000 up until 31st October 2013.

No interest is paid above £6000.

Thanks for the correction, have updated my post :)