Savings advice

utab007

Hi there,

My savings bond recently ended and with interest rates now being low I'm having a hard time deciding where to reinvest my £160k.

Ideally I would like to generate high monthly income and keep my risk medium to low.

Thanks

utab007

I was thinking of opting for aldermore 3yr fixed rate. This gives 2.67% and pays monthly. If anyone can beat that plz say

PeacefulWaters

What are you saving for?

Perhaps an IFA might be a better direction to take.

Archi_Bald

Assuming you are the sole account holder, you are taking a massive risk if you hold the entire £160K in a single financial institution. You could lose half your money overnight.

http://www.moneysavingexpert.com/savings/safe-savings

utab007

Archi_Bald wrote: »

Assuming you are the sole account holder, you are taking a massive risk if you hold the entire £160K in a single financial institution. You could lose half your money overnight.

http://www.moneysavingexpert.com/savings/safe-savings

Thanks Archi, I understand that. The account would be in joint names with my partner as before.

Does a 3 year deal sound most sensible? 2.67% seems competitive and I reckon in 2 to 3 years time rates will be 2% or above

utab007

PeacefulWaters wrote: »

What are you saving for?

Perhaps an IFA might be a better direction to take.

Are you serious? The last IFA told me to invest my money in some ftse tracker fund which would have lost me money. I can't remember the exact details, it was based on ftse going above a certain level on a specific date after some years for me to win. Otherwise, I would have just got back just my capital sum

This IFA was lousy and I've done better following my instincts

Archi_Bald

You are right, the person you spoke to gave lousy advice since it sounds they recommended some sort of a savings plan. Are you sure you spoke to an IFA, as opposed to a tied FA, or even a bank's sales person posing as an advisor? As it doesn't sound like something an IFA would recommend.

2.67% sounds pretty grim because it barely returns you more than inflation will erode your capital by (assuming you are basic rate tax payers). But if it suits you to be in cash, go for it. I presume you have both maxed your ISA allowances?

utab007

How is it a savings plan? It was more like a bet based on the performance of the FTSE. If after x years on some given date the FTSE is above or equal to say 7000 I get 20% return on my capital. And if not I just get back my capital.

Yes, 2.67% is grim. I already have 4 santander 123 accounts with my partner. I don't have enough direct debits to open any more.

I will also be opening some TSB classic and flex direct accounts, but that still leaves a large chunk left over

Archi_Bald

utab007 wrote: »

How is it a savings plan? It was more like a bet based on the performance of the FTSE. If after x years on some given date the FTSE is above or equal to say 7000 I get 20% return on my capital. And if not I just get back my capital.

The sort of thing you describe has been / is being sold by some banks and Friendly Societies as "Savings Plan" or "Structured Product". It's not something an IFA would sell.

utab007 wrote: »

Yes, 2.67% is grim. I already have 4 santander 123 accounts with my partner. I don't have enough direct debits to open any more.

Appears you have maxed the number of 123s you can have now. But there are other accounts that pay the same or more interest rate - e.g. Club Lloyds, Tesco, BOS. Some need DDs, and you can easily set up any number of DDs. You just need one or two Tesco Savings accounts and you are in business.

utab007

Archi_Bald wrote: »

The sort of thing you describe has been / is being sold by some banks and Friendly Societies as "Savings Plan" or "Structured Product". It's not something an IFA would sell.

Appears you have maxed the number of 123s you can have now. But there are other accounts that pay the same or more interest rate - e.g. Club Lloyds, Tesco, BOS. Some need DDs, and you can easily set up any number of DDs. You just need one or two Tesco Savings accounts and you are in business.

Thanks Archi. I will be opening accounts with my partner. How many accounts can I open with each bank? And how much do you think I can use up? Sure, with with my 123 accounts I wanted to get cashback from my DDs to cover my monthly fees. I guess with other accounts not offering cashback from DDs I can just setup a DD from another account

Currently, I pay £500 every month to my 123 accounts, but I guess I should setup a DD incase I forget to make the payment.

And anything left over I will put into the 3yr deal with Aldermore

Archi_Bald

utab007 wrote: »

How many accounts can I open with each bank? And how much do you think I can use up?

see this post http://forums.moneysavingexpert.com/showpost.php?p=65970718&postcount=16

utab007 wrote: »

I guess with other accounts not offering cashback from DDs I can just setup a DD from another account

You want one or two Tesco savings accounts, then you can create any number of DDs that cost you nothing.

utab007 wrote: »

Currently, I pay £500 every month to my 123 accounts, but I guess I should setup a DD incase I forget to make the payment.

It's an SO you want. You can't credit a current account with a DD.