Advice needed on best savings route for £58,000

grace2much

Hi all, I am overwhelmed by the choices and I need some points in the right direction. I have been ill for a number of years and unfortunately I allowed my savings to languish in zero to nominal paying interest savings accounts. I need to take control and make good decisions. I have no debt of any kind and our mortgage is paid off. I also have a instant access account for emergencies.

So the advice I need is for saving that I can lock up for 1-4 years.

I have £24,000 in a zero interest account in my local bank (Not santander).

2 x Isas @ £5645 in Santander with 0.5% interest total...... £11,291

Santander Bond that now pays 0.5% and is until Aug 2015(might be better to swallow the early withdrawal charge and move???).......£23,593

So approximately £58,000.

Gadfium

You need to provide more information, really. Age, pension arrangements, emergency fund for starters

bowlhead99

There's no need to be overwhelmed by choices. Simply list out all the choices that pay the highest interest rates, and start filling them up. There is a handy list in the savings section of the main site (http://www.moneysavingexpert.com/savings/savings-accounts-best-interest?_ga=1.152576624.832878667.1368281118#currentaccount) and then there are literally hundreds of threads on the forum with information.

If you have account relationships with Santander who offer a current account paying 3% interest on up to £20,000, there is no excuse for ignoring that account entirely and putting over £20,000 in a zero interest account elsewhere. That seems to be a waste of almost £600 a year, before tax.

Likewise with the ISAs and the bonds. How on earth would you choose to lock money away in a bond that only pays 0.5% maturing August? Are you sure it's paying you 0.5% and not some better rate while offering 0.5% to new customers? Bizarre. Anyway if it is not paying much interest you won't have much to lose by cashing it in early and moving it the money into accounts that pay 3,4,5% or whatever.

If all of this cash is on top of your instant access account for emergencies then I wonder what you are actually going to spend your £58,000 on and when? Presuming you can do without at least some of it for the long term, transfer your cash ISAs which pay peanuts into an Investment ISA (S&S ISA) with any of the main S&S ISA providers and let it grow over the next decade or two. Or take some of the £58,000 and put in a pension. No wonder the choices are overwhelming ; pretty much anything you could do with your money is better than leaving it in an account paying 0% or 0.5%.

DiggerUK

You have provided enough information, 58K, 1-4 years. ???

If you had said longer, 5+ years, I would have suggested gold.

Up to 4 years you are looking at a serious gamble with equities, or 'zero' returns with cash accounts.
Your call.
..._

redux

DiggerUK wrote: »

You have provided enough information, 58K, 1-4 years. ???

If you had said longer, 5+ years, I would have suggested gold.

Up to 4 years you are looking at a serious gamble with equities, or 'zero' returns with cash accounts.
Your call.
..._

Gold is a bigger gamble than anything else in your post.

grace2much

I agree I need a kick for allowing this, but as I said I was ill and these where taken out in 2011, after that I was in a situation where these type of issues were of no concern to me such was my illness. So everything was left hanging and decaying, believe me I wish things had been different but that's life. Things are improving now hence my questions.

I checked the Bond and it now pays gross annually 0.50&% and net 0.4% in 2011 it was 3.05% gross and 2.44% nett. The Isa's is 0.50% anually in 2011 it was 3.30%.

OK so more info:

I am sorted with pensions via a personal pension.
I am 55
Emergency fund of £8000

The £24000 in the zero % account was money I had in 5 different accounts (very low interest again) that last week I closed and moved to the one account so I can asap move from here to a better home.

I have just rang my local branch of Santander to make an appointment to see them next week. Hopefully to open the 123 account.

xylophone

Open the open the 123 - transfer your DDs for power, council tax, water, phone to it so as to benefit from cash back?

Consider a longer time frame for the ISA cash - maybe transfer to a stocks and shares ISA with say i web - you might choose the gross Acc version of a Distribution Fund - I have used Invesco Perpetual for a number of years and been content - not exciting but steady enough?

Otherwise, if you wish to keep the ISA in cash, transfer to a product with a better rate.

http://www.thisismoney.co.uk/money/saving/article-1583864/Best-savings-rates-Isas-Cash-Isa-accounts-fixed-rate-Isas.html

Use high interest current accounts for the balance of the money?

https://forums.moneysavingexpert.com/discussion/comment/67759045#Comment_67759045

grace2much

xylophone wrote: »

Open the open the 123 - transfer your DDs for power, council tax, water, phone to it so as to benefit from cash back?

Consider a longer time frame for the ISA cash - maybe transfer to a stocks and shares ISA with say i web - you might choose the gross Acc version of a Distribution Fund - I have used Invesco Perpetual for a number of years and been content - not exciting but steady enough?

Otherwise, if you wish to keep the ISA in cash, transfer to a product with a better rate.

http://www.thisismoney.co.uk/money/saving/article-1583864/Best-savings-rates-Isas-Cash-Isa-accounts-fixed-rate-Isas.html

Use high interest current accounts for the balance of the money?

https://forums.moneysavingexpert.com/discussion/comment/67759045#Comment_67759045

Thanks for this very helpful. I think I need one last piece of hand holding:-) So say I close my 2 isa's that are worth 11,291 and move them into another better isa can we still open 2 new isa's x 15000 this year as well?

xylophone

If you want to keep the ISA status on the old ISAs, remember that you must ask the new provider to arrange a transfer.

If you have not used your ISA allowance at all in this tax year then you can still pay up to £15000 into an ISA before 6 4 15, as can your partner.

The allowance will increase to £15 240 per person on 6 4 15.

bowlhead99

So say I close my 2 isa's that are worth 11,291 and move them into another better isa can we still open 2 new isa's x 15000 this year as well?

You can't open 2 new isas x 15,000 for 30,000 total if there is only one of you. In any tax year you can put 15,000 total of new money, split however you like between a cash ISA and a stocks & shares ISA.

So if your old ISAs totalling 11,291 are from previous tax years you can move them anywhere you like into any cash ISAs or S&S ISAs that accept transfers in. Separately you can put in 15,000 of completely new money into a new cash ISA or S&S ISA or both during 2014/15 tax year. Then in April you will be in the 2015/16 tax year and will be able to put yet another 15,240 (slightly increased limit) of new money into a new cash ISA or S&S ISA or both.

Unless when you say 'can we open' you mean there are two of you (a partner / spouse / other half?). If that's the case you can both move £15k to ISAs for 2014/15 and both move £15.24k to ISAs for 2015/16, a total of £60k+ of new money.

However as mentioned by others, by the time you've explored all the high interest current accounts and regular saver accounts, (especially if there are two of you - allowing you to have twice as many of the top accounts and even joint accounts too), you will not be looking to put £30k or £60k into cash ISAs. Because assuming you're only paying 20% or 40% tax you will do better to get a high gross rate and pay tax, than get a rubbish gross rate in an ISA and not pay tax.

With market interest rates as they are, non-ISA cash accounts pay better than ISA cash accounts. If you want to make use of your ISA allowance rather than lose it, then S&S ISAs are worth looking at, just not for a short term timescale.

bigfreddiel

bowlhead99 wrote: »

You can't open 2 new isas x 15,000 for 30,000 total if there is only one of you. In any tax year you can put 15,000 total of new money, split however you like between a cash ISA and a stocks & shares ISA.

As the poster said 'we' in the post it obviously implies a partner so yes you can open 2 isa's, one each simples!

Cheers fj