Building the house deposit

Conanius_2

Hi All,

We are currently saving up as much as we can towards a house deposit.

Last year we were a bit slack, buying a new car, a few other expensive silly things, holidays etc, but this year it needs to be focused !

We have just come to the end of a 12 month regular savings account with First Direct which both myself and my wife had one of, both saving the maximum £300 per month (£3600 in each account, £7200 total).

We could comfortably go up to £1000 per month total savings, so I'm keen we make the most of our savings potential now when we don't have other commitments to worry about.

Across all our accounts as it stands, including money we have in a regular savings account we will have enough to both maximise our ISA allowances (£5400?, so £10800 total) by April, but I'm keen to know what people feel the best way to save further cash is.

It appears that the regular saver 8% isn't totally useless, so I'm tempted to:

-Move the current two lots of £3600 into our ISA's
-Top up the ISA's by the end of March to maximum cash ISA limit
-Open two new 8% regular savers, putting in the maximum £300 PCM
-Put the remaining £400 PCM savings allowance evenly into our respective ISA's.

Seem a sensible way forward? or would people focus on filling the ISA's instead?

As this is our house deposit fund I'm only after zero risk to capital investments.

jimjames

Probably where you put the money is fairly irrelevant - the main thing is being able to save it in the first place but max the tax free savings first so definitely use ISAs!

Look at budgets etc and where you can trim expenses to maximise your saving potential, even small savings can add up over the year.

bowlhead99

Conanius wrote: »

-Move the current two lots of £3600 into our ISA's
-Top up the ISA's by the end of March to maximum cash ISA limit
-Open two new 8% regular savers, putting in the maximum £300 PCM
-Put the remaining £400 PCM savings allowance evenly into our respective ISA's.

Seem a sensible way forward?

Generally seems fine. If you definitely have enough to max out your ISAs on Apr 5th then that's great and you can just worry about where to put the rest in the highest earning account you can find.

But if you think there might be any risk of being unable to afford to top up your ISAs to their max by the Apr tax deadline, then still open the 8% reg savers (to make sure you get that product while it still exists), but perhaps don't max it out at the full 300pm.

You need to get 5640 in each of those ISAs by middle of the first week of April in order to get a tax shelter around the last pounds in the account - which you can then keep for the rest of your life if you want, rather than losing it forever. The FD accounts allow you to 'catch up' any underfunded months later if you like and you should do that in priority to ISAs once you get into the new tax year, because the rates are higher with FD than they will be on the ISAs.

or would people focus on filling the ISA's instead?

You don't need to focus on putting anything at all in the ISA this month or next month if you could instead get the more lucrative FD net rate or other good regular saver rates on most of it. You just need to have enough cash on hand to max the ISAs by midnight 5 April as that's the only day they close the books and take any unused ISA allowance away from you.

So depending on circumstances you might throw money into those other regular savers and FD accounts and then hold back from doing that in March/April to ensure you finish the ISAs off. Once April comes and goes, same principle - focus on getting the absolute best net rate from month to month as long as it will not prevent you from maxing the 13/14 ISA allowance by Apr 2014.

innovate

Conanius wrote: »

-Move the current two lots of £3600 into our ISA's
-Top up the ISA's by the end of March to maximum cash ISA limit
-Open two new 8% regular savers, putting in the maximum £300 PCM
-Put the remaining £400 PCM savings allowance evenly into our respective ISA's.

Much what I would do if I were you. Definitely give the FD Reg Savers priority over ISAs with your new savings, because it beats all ISA interests by some margin right now.

I would also look at current accounts that pay interest and/or cashback, such as Santander 123 or Lloyds/BoS Vantage.