Savings kerfuffle with Fixed ISA - what shall I do with my savings now?

evenasus

There are always people on here willing to answer any questions.

Keep reading and you'll soon become financially savvy.

Good luck with your deposit saving.
It's been 48 years since we started our 3 years saving for a deposit. It wasn't easy then either.

nicedream_2

That's clear - thanks Robin. Well done on your savings

Any

nicedream wrote: »

Ah - 'easy access' that's clearly what I want. I thought fixed rate meant the interest rate was the same for the two years... learning slowly!

That's the current account I had this year as well. I don't think i've known any other golf result than that one. Glad it's not just me getting confused about these things

The First Direct regular saver is unaccesible for 12 mths if you want the interest.. If you want easy access bear that in mind.

innovate

Current accounts
You can have as many current accounts as you like. As long as you keep them in credit, they will not adversely impact your credit rating. If anything, well managed accounts will help a positive credit score.
It is not uncommon for some MSEers to have 3+ Lloyds Vantage accounts, 2+ Halifax Reward Accounts, 1 Flexaccount, 1 First Direct, 1 HSBC, 1 Santander 123, 3 BoS Vantage accounts, and for good measure the odd current account with Natwest and/or RBS, Metrobank, and may be some Building Societies, too. So that's a dozen or so current sole accounts, before you even add any joint accounts...... You just have to be absolutely certain that you can handle several accounts - i.e. comply with the T&Cs (and changes to T&Cs), and stay on top of what money you have where when.

Regular Savers
The FD Regular Saver is a great account to have because it beats any ISA interest rate. Shame you can pay max £300/mth into it - but better than nothing.
If you want to bag the £100 account opening bonus for the pre-req FD Current Account, you must use their switcher service and transfer at least 2 DDs. Then pay in £1.5K until you got the £100. After that, or if you don't want the £100, you just need one of their normal savings accounts (with £1 or so in it) to avoid charges etc.

Other Reg Savers might be useful if you have more than £300 a month to put aside. Or look at current accounts that pay 3% AER - Santander 123 (one of my favourites), Lloyds Vantage, and BoS Vantage.

Note the for most Regular Savers, you must lock your money away for at least 12 months, and monthly deposit amounts can often not be changed once set for the first time. Read the T&Cs.

ISAs
You appear to have overlooked - like several others seem to have done - that fixed rate ISAs generally have stringent terms when it comes to deposits. E.g. you must deposit within x days of opening, or you can make max x number of deposits by date xx/xx/xx. That's the same for non-ISA fixed term accounts, btw, and at any bank or BS.

So yes, you cannot pay more new money into a cash ISA before April 6 2013. But you can

1. definitely open a new cash ISA on or after April 6 2013, and pay in up to your 2013-14 allowance (£5,670, if memory serves me right)
2. open a S&S ISA now, and pay in £11,280 minus what you already deposited into your cash ISA
3. open another S&S ISA on or after April 6 2013, and deposit anything up to your total ISA allowance, minus any cash ISA deposits for the financial year, into it

Retirement income
You haven't mentioned how you are doing for your income when you are no longer working.....something easily forgotten when you are young. But the earlier you make provisions for it, the more you will have when you need it. You get quite a bit of tax relief if you save for a pension - but you have to lock the money up until you are at least 55. If you have spare money now, consider putting it into any voluntary company pension scheme, or into a SIPP. You will most likely be immensely proud of your foresight once you draw that retirement income :cool:

innovate

evenasus wrote: »

Actually - it's now a 4.10% as they said they would pay .10% if Rory Mcllroy won certain golf games.

Hate to correct you but it isn't really a full 4.1%, despite publicity (incl official MSE site) to the contrary. Though it does come pretty damn close, somewhere in between 4 and 4.1%, depending on how much you have in the ISA.

What we get is

1. 4% AER for each of the 2 years
2. 0.1% "Rory" bonus, which will be applied to [most of] the balance at maturity

From the official Santander bumph:

The additional one-off bonus is not calculated as AER, but as a tax-free rate applied to the balance at maturity. The bonus is calculated on the balance including any interest you have had paid back into the ISA. It will exclude the final interest payment payable on 1 June 2014.

nicedream_2

Thanks evenasus. Sadly i've been reading these forums for quite a while now but only recently shifted from the debt to saving. Well done on your savings! I really like your quote in your signature by the way.

Any, I don't want access to my savings to withdraw any money, i'm happy to keep it locked away for the time period. I just want access to make regular payments.

Innovate - thank you. I think you've helped me out before

I'm very anti-overdraft now so will make sure I've got a cushion before I open any account. The fact that a lot of MSEer's have lots of current accounts, is exactly what I was looking for.

I have just moved to an employer who pays me 8% and I contribute 6%. I am very happily saving for a pension now (after five years of my working life, not having a pension savy employer). I might think about more in the future, but at the moment I really want to save to be able to buy a house and think this will benefit me in the long term as well.

Moral of the story: don't just read the terms and conditions once and then put them aside...

innovate

innovate wrote: »

Hate to correct you but it isn't really a full 4.1%, despite publicity (incl official MSE site) to the contrary. Though it does come pretty damn close, somewhere in between 4 and 4.1%, depending on how much you have in the ISA.

Actually, seems I was wrong myself, too - -- however much you deposited, assuming you had your money in for a full 2 years at maturity, the AER seems to be around 4.1% (yay!).

There is a little online spreadsheet that lets you calculate how much you get. https://docs.google.com/spreadsheet/ccc?key=0Arkk5qBMmfMadEFYQUNncC12WnlrRHZYLTdIaUtRdUE#gid=0

nicedream_2

Thanks Innovate - that spreadsheet is really helpful.

tanith

Thanks Innovate thats made me really happy... as I had several previous years in there too... YAY!!!!!! says my rate is 4.13%