Which savings account for my money...

wannabemedic

I'm a little confused I've got the following savings:

Premium Bonds: £1000 (intend to withdraw these asap)
NS&I ISA (0.5% above base rate): £3000 (deposited last tax year)
A&L online saver (4.5%): £4,500
Nationwide e-savings (5.30%): £100

So potentially I have £1000 to put somewhere asap (the premium bonds) but also am looking to ditch A&L's online saver which is paying a paltry rate of 4.5%.

Is nationwide e-savings the best bet for me? Or are there other accounts out there - I've looked at the board but I'm getting confused about which rates are the best and what different accounts are. I'd thought of more in the NS&I ISA but that would then use up my £3000 allowance this year and I'd probably end up needing to use that cash.

In the next year or so I'll be buying a car and some home improvements may be in order.

The £3k ISA I put in NS&I as it was 5.85% at the time and will always be 0.5% above the base rate till 2008 or something. I put it there for the sake of using the tax-free allowance.

Hope someone can help me decide where to move the money, cheers :beer:

dancingfairy

Martin has an article on the best savings accounts here:http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1098730527,15721,

It is updated fairly regularly but for the most up-to-date info there is a link in there that takes you to a comparison site where you can search. I would put the link in but if you follow the article from Martins site it gives the site money per click on it I think. Search for savings accounts and put the money in you want to save and then it gives you some to look at.

The best seems to be around 5.80% for internet savings accounts at the moment although some of them have strict conditions so you definitely could do better.

It depends whether you are willing to switch in a year or so as a lot of them have bonus rates for a year.

Hope this helps.

mleonard79

Hi wannabemedic,

I know you say you used your £3k ISA allowance last tax year but have you used this tax year's allowance yet? If not then that should be your first port fo call for the £1K bond and some of that money in the A&L saver. Check out Kazza's Isa List thread for all the details of the best ISAs at the moment for new money.

After that as Dancingfairy says above it depends on whether you want to tie the money up or you'd like instant access. There are quite a number of good instant access accounts around these days that pay better than your A&L and Nationwide accounts and that article will point you in the right direction.

Regards

Michelle

Woodyrocks

Hey Wannabemedic, noticed you are already saving with A&L, you only need another £500 to get their top saver a/c which is 5.8%.

mleonard79

Woodyrocks wrote: »

Hey Wannabemedic, noticed you are already saving with A&L, you only need another £500 to get their top saver a/c which is 5.8%.

Hi woodyrocks,

To be honest I don't think it's worth going for this account while Icesave at 5.7% and ICICI at 5.65% have nearly comparable rates but without the extra conditions (ie losing all interest for any month in which you make a withdrawal.)

Regards

Michelle

wannabemedic

Thanks for the replies, appreciate your time

I'm not too worried about switching each year as long as it won't affect my credit record

I would use this year's ISA allowance but at the moment I'm looking to buy a car in a few months - if I do put it in the ISA I may end up withdrawing it then losing this year's allowance, or is that just me being silly about it?

Regarding the A&L 5.8%, if I lose interest in a month of withdrawl, what about waiting till the 1st of a month to withdraw all the cash and dump it all in a similar rate account elsewhere? That way, if I'm thinking straight, I've not lost any interest with A&L.

I've now looked at the article and been through the comparison site, it looks like A&L's direct saver is going to be the best bet. 5.8% interest calculated daily and paid on the 1st of the month is too good and much better than the 4.5% they're paying on the online saver :rolleyes: I can easily move my money out on the 1st or 2nd of the month to a different saver and not lose much interest, hurrah! :T

Thanks very much I'll start shifting money around, first port of call: axing my premium bonds

mleonard79

wannabemedic wrote: »

Thanks for the replies, appreciate your time

I'm not too worried about switching each year as long as it won't affect my credit record

Hi wannabemedic,

Savings accounts do not affect your credit rating in any way - only accounts where you receive credit of some description (ie overdraft, credit card, loan, mortgage) affect credit rating. You can apply for and have as many different savings accounts as you like as they do not show up on credit reports at all.

I would use this year's ISA allowance but at the moment I'm looking to buy a car in a few months - if I do put it in the ISA I may end up withdrawing it then losing this year's allowance, or is that just me being silly about it?

No you are not just being silly - if you put £3k into an ISA now and then withdrew it in a few months to help finance a car you would have used your tax allowance for this year and would not be able to pay it back. Once you've paid into an ISA the money has to stay in it or get transferred to another ISA in order for you to keep your allowance as if you withdraw it you lose that allowance.

Regarding the A&L 5.8%, if I lose interest in a month of withdrawl, what about waiting till the 1st of a month to withdraw all the cash and dump it all in a similar rate account elsewhere? That way, if I'm thinking straight, I've not lost any interest with A&L.

Yes you can do this - remember though to withdraw ALL of the money in the account and not just whatever you wish to withdraw as you don't just lose interest on the amount you withdraw but on the entire amount left in the account for that month too. You can see a discussion on this here and a more detailed discussion on the account as a whole here.

it looks like A&L's direct saver is going to be the best bet. 5.8% interest calculated daily and paid on the 1st of the month is too good and much better than the 4.5% they're paying on the online saver :rolleyes: I can easily move my money out on the 1st or 2nd of the month to a different saver and not lose much interest, hurrah! :T

To be perfectly honest if you're thinking of going with this account you need to weigh up whether or not you will be going to make many of these withdrawals. If you do not need access to the money and won't need to make many withdrawals then it's fine to go for this account and simply withdraw all money from it when you decide to move away from it or need the cash. In that instance it is a good account but my personal feeling is the rate would have to be a lot better than 0.1% better than the next best rate to make it really worthwhile.

If you will be making withdrawals, however, then it's not worth it at all and the wrong account for you. First of all there's all the hassle of moving all of your money from A&L to Icesave or similar at the start of a month and then moving it back again just to get access to some of it and then there's the interest you would lose during all the days it's on the move. So for the sake of 0.1% you could get an Icesave account and not have to worry about that - if you were going to make withdrawals even a couple of times a year I'm sure the 5.7% rate would work out to be the better rate for you anyway. Good luck with getting it all sorted out!

Regards

Michelle

ManAtHome

Well you could pull £3k out of A&L savings into NS&I ISA for this year. Still worth putting it in even if you think may need it (rates are better than most taxable savings accounts) - you may also be able to talk yourself out of withdrawing it in 6 months time.

The rest - either bung it in nationwide or move the lot into IceSave - depends whether you have (or may need) a Nationwide debit card - great for overseas cash.

GCH888

Probably best to wait a couple of weeks to see how the interest rate rise will affect the savings market. If the BoE does increase by 0.25% then ICESAVE should increase it's rate to at least 5.75% AER.

If BoE goes up by 0.5% (unlikely) then I can start buying the nice toilet paper!

wannabemedic

Thanks again - regarding waiting a couple of weeks for interest rate rise, that won't take effect till the following month and I'm not prepared to leave my £1k in premium bonds to earn them money. I've already lost a potential £126 in interest by leaving it there without any winnings :doh: my sister on the other hand, she invested £500 in February and according to the online checker has this month won £50 :rolleyes: I'll always be the unlucky sod
Michelle - thanks so much for your reply I appreciate your time :beer: OK so firstly, what I'd do is put in all available funds into the A&L Direct Saver. I know for certain I won't need access for a few months. When I do need access to the money I'd probably end up needing most of it in which case I'd pop it over to an ICICI account. One thing I'm a little concerned about is ICICI being a foreign bank, I know they're covered by the FSA scheme which covers 100% of your losses within £2k but above 2K you'd lose if they did go down. Are these legitimate concerns? If not then I'd be happy to just open an account there. Provided they don't pull an ING on us i.e. start with nice high rates then drop down to screw people who aren't motivated enough to move the money away. If it's a solid bank with no greater risk than any other institution then I'd be happy to open an account with them, so this could well be the better option for me. I'd still be getting over 1% extra over what I'm getting now so a win win situation! :T

ManatHome - I could do that but it's very likely I'm going to need almost all the 5k, if I put 3k in an ISA that leaves 2-3k to play with, that's not enough to buy the car I'm eyeing up! I'd rather do a last minute transfer into an isa when I'm sure it's a use it or lose it situation regarding the allowance.

GCH888 - nice toilet paper :rotfl: :rotfl:

ManAtHome

You may think it's worth leaving the PBs another month - 5 million-quid prizes in June (you can always cash them in on the 2nd...) - will "cost" you another £4.