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Help to save: interest on savings

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Hello All,

I am currently looking towards saving for my first home (21 y.o.). I am using a Barclays current account plus a Barclays savings account.

I have circa £12k saved presently, and I have continuously put 500-700 away each month from my wage to reach that.

I am only receiving approx. £5 a month interest however, which seems extremely low versus what I could receive.

Has anyone got any suggestions on my best options?

I plan to continue saving a similar amount each month, to reach circa £25k eventually as a deposit.

Thank you for your advice in advance.

Regards,
Jim

Comments

  • splatt30
    splatt30 Posts: 339 Forumite
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    edited 30 January 2016 at 4:51PM
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    Best interest rates currently seem to be in current accounts.

    Nationwide is paying 5% on unto £2500, and also has a linked saver which you can increase the balance of by £500 per month, also at 5%. You need to pay £1000 into the current account each month.

    TSB will also pay 5% on a current account unto £2000, plus has a regular saver earning 5% to which you can add £250 each month. You need to pay in £500 each month.

    So pretty quickly you could be earning 5% on £5250 and increase this by £750 per month. It requires a little fiddle on the pay ins. But pay in £1000 each month to Nationwide, then move £500 into their regular saver and £500 to TSB. Then pay £250 into TSB regular saver and move £250 back to Barclays.

    You could also look at the Tesco current account which pays 3% on £3000.

    Most of the other of the high paying current accounts require you to set up direct debits from them and or have a fee, but these are a way to get started. I have just opened all these accounts, plus a Santander 123.
  • slig
    slig Posts: 400 Forumite
    First Anniversary Combo Breaker Debt-free and Proud!
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    Have you opened a Help to Buy ISA yet? Halifax is the current best buy. You can save £1200 in your first month and £200 thereafter, so you'll need to combine with other accounts as Splatt has outlined above


    Well done on your savings so far, I'm impressed. I save a similar amount per month as you, with £9k saved so far, and I'm 11 years older than you!
    Debt at LBM (17/10/08) £5727.61 Debt free date 31/08/09
  • enthusiasticsaver
    enthusiasticsaver Posts: 15,732 Ambassador
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    edited 30 January 2016 at 8:44PM
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    Open Halifax Help to Buy ISA with £1k and pay in £200 per month to qualify for 25% government bonus and get 4% per annum.


    Open Nationwide flex direct account with £2.5k and regular saver with £500 and pay in up to £500 per month to earn 5% per annum.


    Open TSB classic account to earn 5% on £2000.


    Both TSB and Nationwide have funding requirements so transfer £1000 into Nationwide and from that do a £500 monthly transfer to regular saver and £500 to TSB then back to funding account all on the same day.


    Either open 2 Tesco accounts for £3k each earning you 3% on your remaining £6k or open a Club Lloyds account for £5k and 1 Tesco for £1k but you will need to set up 2 direct debits on the Lloyds account and transfer £1500 in and out every month either by standing order or manually. Tesco has no funding requirements so they are simpler to operate.


    All the above would mean you would be earning 3-5% on your savings and qualify for the government bonus on the Help to Buy. If you switched an existing account to TSB you could earn a further £100.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
  • Eco_Miser
    Eco_Miser Posts: 4,708 Forumite
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    You could get 6% on your monthly savings in three Regular Savers. See this list of worthwhile accounts.
    Eco Miser
    Saving money for well over half a century
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