Best place for my savings

Tom_Brine

I am saving for a house deposit. At the end of the year I will have around £23k.

I have £5640 in a cash ISA at 3.3% with Santander, and £16k or so in a Santander Esaver at 3.2%. Currently £550 a month gets paid into the Esaver which will fund next years ISA.

I have just opened a first account and everyday Esaver with First Direct and deposited a pound into each. On the 3rd december I have requested a regular saver at 8% to be opened to take £300 of my £550 savings per month. This means the Esaver will only recieve £250 a month from now on.

My question is is this the best thing to do? A friend said that the money would have been better off in with the rest of my cash. I explained for each pound of the 550 I save it is better to get 8% on 300 of them than 3.2 on all of them. But I am now going round and round in my head and have confused myself.

Have I done the best thing to make my money work for me or should I not have bothered with the 8% regular saver with first direct?

latecomer

As far as I know 8% is higher than 3.2% so put the maximum in there per month and the rest into your esaver. You can also get other regular savers which pay more than 3.2 but beware that at least some dont allow withdrawals

psychic_teabag

The only time it might be beneficial to keep your money together might be if the interest rate is tiered, and you get more interest (on the entire balance) as the balance increases. e.g. LLoyds and Santander current accounts pay 2% up to £3000 or 3% over £3000, so going from £2999 to £3001 gives you an extra 1% interest on the entire £3k balance.

andy.m_2

I have a saffron saver at 6% and am in the throes of setting up with first direct to bag the 8% as well.
This takes care of my short term needs and are out performing any ISA I care to compare