Best place for regular small monthly savings?

empy

Hi all,

I'm looking at saving a small amount monthly- £25.00-£50.00 looking long term 5-10 years. Have been looking at Scottish friendly, LV savings plan type thing ( with the life insurance payout, these say that they will pay premiums paid plus 101% of units held- I don't understand this, good or bad?)

Do any of you experienced and knowledgeable savers have any suggestions re the above?

Many, many thanks

Emma

poolforever

First Direct currently have a 6% monthly saver which might suit you? You would get the interest annually.

empy

Thank you, is that 6% yearly of fixed for a year?

poolforever

Say you put £50 a month away - the interest is cumalitive. So 6% on £50 for first month, then 6% on £100 second month etc..... etc...

Over the year (after tax) it would equate to about 3% on £600.

Last year their fixed rate was 8% - this year it's 6%. I would imagine it will at least stay the same next year.

Archi_Bald

The FD regular saver will almost certainly pay more than any "friendly" plan because you get what it say on the tin, there are no hidden admin charges like with savings plans.

The FD Regular Saver has been available for years, with varying interest rates but never below 6% AER, and you can open a new one as soon as your existing one has matured.

empy

Thank you both I'll explore FD.

Archi_Bald

poolforever wrote: »

Over the year (after tax) it would equate to about 3% on £600.

This is true, but that would require the £600 upfront. If the OP does have £600 upfront (which it doesn't sound likely from the post), they could put the full amount into a 5% TSB account, and realise 5% (all %age figures before tax).

The OP must compare apples with apples. If they put £50 a month into the FD Regular Saver at 6% AER, they'd need to compare this with the AER they would get from the "friendly" scheme if they did put £50 a month into that. They must not fall into the trap and compare the return they would get from depositing a £600 lumpsum upfront - mainly because this isn't what they would be doing, anyway.

empy

I already have two TSB accounts one with the full amount allowed to earn the interest and the other will be hitting the full amount in the next few months. I was hoping to find something else to put in a small amount monthly and have a payout after 5 or 10 years and possibly increasing the monthly amount yearly with each pay rise I get. I'm wondering if some type of shares investment type fund may be a good idea? Though I'm completely clueless

bigadaj

empy wrote: »

I already have two TSB accounts one with the full amount allowed to earn the interest and the other will be hitting the full amount in the next few months. I was hoping to find something else to put in a small amount monthly and have a payout after 5 or 10 years and possibly increasing the monthly amount yearly with each pay rise I get. I'm wondering if some type of shares investment type fund may be a good idea? Though I'm completely clueless

Investment trusts could be useful for you, and many will take small monthly payments.

You'll need to do some reshape arch and learning but they have a good long term record, similar to unit trusts or oeics but they are private companies that invest in other companies, and have been around a lot longer, the oldest go back 150 years or so. Some information is on their trade website which is theaic.co.uk.