Short term savings account?

Sheens

I am currently saving for a deposit on a flat and trying to find the best interest rates to store my money in.

I already own a santander 123 account but have now reached the maximum 20k that interest can be accrued upon.

I need to find another savings/Nisa account (for the rest of my money) but one where I will not have to pay large cancellation fees or lose a high amount of interest as I plan to buy in approx 6 months time (essentially I only need this account for 6 months).

I have about 5k to invest which is growing.... can anyone recommend where I should save this so I can at least gain some interest off this money!

Thanks in advance

anoncol

This link above has the best interest paying bank accounts. Current accounts are higher than savings.
http://www.moneysavingexpert.com/banking/compare-best-bank-accounts?_ga=1.58684394.1334228974.1402218821

YorkshireBoy

If you want it all in one place, then a savings account will only pay you around 1-1.4% AER.

If you're prepared to open several current accounts (and jump through a few hoops) you could get 3-5% AER, ie 4x the amount. You'll have to weigh up the pros and cons of doing so, ie increase in interest* received over such a short timescale vs possible damage to your credit file affecting any mortgage application.

* For example, if you can save £10K over the next 6 months then your average balance over that time is £5K. £5K x 4% / 2 = £100 gross. Compare this with a 1.4% savings account and you'll be around £52 better off after basic rate tax with the current accounts. Is it worth the risk?

Are you on your own, or are there two of you saving for the deposit?

agrinnall

YB, when you say "is it worth the risk", what risk are you referring to? I would have thought that as long as the OP keeps a positive balance in the current accounts then it wouldn't have any negative impact on their credit record - which if they intend to use them simply for saving shouldn't be too much of a problem, as long as they ensure any transfers in and out required to keep the interest rate are done in a timely manner.

Sheens

YorkshireBoy wrote: »

If you want it all in one place, then a savings account will only pay you around 1-1.4% AER.

If you're prepared to open several current accounts (and jump through a few hoops) you could get 3-5% AER, ie 4x the amount. You'll have to weigh up the pros and cons of doing so, ie increase in interest* received over such a short timescale vs possible damage to your credit file affecting any mortgage application.

* For example, if you can save £10K over the next 6 months then your average balance over that time is £5K. £5K x 4% / 2 = £100 gross. Compare this with a 1.4% savings account and you'll be around £52 better off after basic rate tax with the current accounts. Is it worth the risk?

Are you on your own, or are there two of you saving for the deposit?

Yes I am on my own saving. I found that some current accounts either expect at least 2 direct debits to be set up (I don't have a lot set up on the current one I have). Will it really affect my credit rating if I start opening more current accounts?