Where do I save my £1000?

Blue_mo

Hello,

I require some financial advice from you finance supremos!

Currently, I have a Barclays graduate account. My monthly salary means I'm saving £1k a month (there abouts), and I feel rather bad it's just in my grad account lying there.

I don't waste money nor do I impulse buy, but I am saving for a shiny new car!

So, I wanted to ask, which financial vehicle should I save my £1k in? I don't mind being locked in for a period of 6-12 months in an account, but I wanted your advice ... if you had a disposable income of £1k, how would you save it?

HappyMJ

Blue_mo wrote: »

Hello,

I require some financial advice from you finance supremos!

Currently, I have a Barclays graduate account. My monthly salary means I'm saving £1k a month (there abouts), and I feel rather bad it's just in my grad account lying there.

I don't waste money nor do I impulse buy, but I am saving for a shiny new car!

So, I wanted to ask, which financial vehicle should I save my £1k in? I don't mind being locked in for a period of 6-12 months in an account, but I wanted your advice ... if you had a disposable income of £1k, how would you save it?

You could open a regular saver and drip feed £250 a month into it. Open multiple accounts a few months apart to be able to save more. By opening a few months apart they will mature at different times of the year.

Blue_mo

I was thinking plonking a grand a month in NS&I Premium Bonds. It provides me with some inflation protection and I get a monthly chance of winning the jackpot.

HappyMJ

Blue_mo wrote: »

I was thinking plonking a grand a month in NS&I Premium Bonds. It provides me with some inflation protection and I get a monthly chance of winning the jackpot.

NOOOOO!!!...sorry for screaming. Premium Bonds are awful. If you could get 3% interest on your money you would get £2 a month after tax (assuming you pay tax) each month which you could use to buy lottery tickets. The odds are much better at winning the lottery than winning the top prize on premium bonds. Lottery odds are 13,983,816 to 1. Premium Bond odds are about 40 to 45 billion to 1 every month. The average (assuming you win big every now and again) is 1.3%. If you don't win big it's about 0.8%.

Archi_Bald

HappyMJ wrote: »

If you could get 3% interest on your money

You can get 3%. http://www.moneysavingexpert.com/savings/savings-accounts-best-interest

BTW, this is not financial advice, it's just sharing information.

HappyMJ

Archi_Bald wrote: »

You can get 3%. http://www.moneysavingexpert.com/savings/savings-accounts-best-interest

BTW, this is not financial advice, it's just sharing information.

Do you mean the Santander current account which you have to pay £2 a monthly fee? The return on £1,000 after the interest and the fee would be nothing. I said could as the applicant would have to have a good credit rating to get that account as it isn't a normal savings account.

Archi_Bald

It's easy to get more than £2 in cashback on the 123 account. Also, as the months go past, the balance increases and therefore the amount of interest increases. It is true, however, that you need to pass the credit check to get a current account.

There are other current accounts that pay 3%, or even 5%, with no monthly fee. Lots of information on these on the MSE forum, mainly on the savings and investment board.

matttye

Do you live anywhere near a Nottingham Building Society? If so, they have an ISA paying 4% and you can deposit up to £480 per month into it.

http://www.thenottingham.com/savings/starter-isa-issue-3/

It's a branch-only account. You can't withdraw money from it until April 2014, but you can transfer to another provider with a penalty of 180 days interest.

If you just want to take the easy route and put it all in one account, I agree with Archi Bald - go for the Santander 123.

If you use it as your main current account and pay bills from it, you'll get cashback on your bills, so it'll more than pay for the £2 monthly account fee.

SavingRookie

matttye wrote: »

Do you live anywhere near a Nottingham Building Society? If so, they have an ISA paying 4% and you can deposit up to £480 per month into it.

http://www.thenottingham.com/savings/starter-isa-issue-3/

It's a branch-only account. You can't withdraw money from it until April 2014, but you can transfer to another provider with a penalty of 180 days interest.

If you just want to take the easy route and put it all in one account, I agree with Archi Bald - go for the Santander 123.

If you use it as your main current account and pay bills from it, you'll get cashback on your bills, so it'll more than pay for the £2 monthly account fee.

The Nottingham BS is a good option if you live near Notts/Sheffield/Lincolnshire - the also have a decent regular saver account like mentioned previously called Summer Saver that has a 5% interest rate

http://www.thenottingham.com/savings/summer-saver/

matttye

SavingRookie wrote: »

The Nottingham BS is a good option if you live near Notts/Sheffield/Lincolnshire - the also have a decent regular saver account like mentioned previously called Summer Saver that has a 5% interest rate

http://www.thenottingham.com/savings/summer-saver/

Yeah I saw that! That's good as well.

I think the ISA is preferable if you haven't get used up your allowance for the year, as 5% with BRT deducted on the summer saver is the same as 4% tax free on the ISA, and the ISA allows you to deposit more each month.

Both very good accounts though. I've just realised there's one not too far from here so might open one!

Edit: although nothing to stop you opening both I guess.

Bloomberg

Blue_mo wrote: »

Hello,

I require some financial advice from you finance supremos!

Currently, I have a Barclays graduate account. My monthly salary means I'm saving £1k a month (there abouts), and I feel rather bad it's just in my grad account lying there.

I don't waste money nor do I impulse buy, but I am saving for a shiny new car!

So, I wanted to ask, which financial vehicle should I save my £1k in? I don't mind being locked in for a period of 6-12 months in an account, but I wanted your advice ... if you had a disposable income of £1k, how would you save it?

I would put half into investments, and save half as cash. To be honest whilst rates are so pitifully low you will not be getting any great rates.