Savings account advice needed

Neil_42

Hello, I've recently started earning a good income and wanted to start saving in a high interest account, but from what I've gathered this is far more diffuclt than it used to be back in the day. Here is what I'm looking to do:

- Save up to 4 to 6k a month for a year or two where I will then attempt to buy my first flat/home for about 100k.
- Start saving again after purchased first home for the next rung on the property ladder.
- I cant get a mortgage as my income is not guaranteed, plus I can't afford any stress due to a medical condition so I can never put myself in debt as I need to protect my health.
- I'm not looking to invest in a pension until I've secured my first home.
- I'm looking for a 1 to 2 year account, fixed rate interest of about 4 to 6% pa, although all the highstreet accounts are valid for 1 year and have a £250 to £400 limit per month on what I can save (as far as I can tell that's the case anyway).
- I don't want to invest in stocks and shares or property due to the current predications of a UK housing bubble and second big crash, also I don't want to put my money at risk and need it covered by the 75k protection in case the company it's with goes bust.

So far it looks like I'll need to have 3 highstreet accounts which would need changing to 3 different banks/institutions after a year, and even then I can only put in around 1k a month, which is not what I'm looking for, or am I missing something?

What I think I need is two accounts in two different banks which accept 2 to 3k a month for savings @ the highest interest rate available. But do these type of accounts even exist? I did think about premium bonds, but they're only 1% interest if you're 'average' on the 'lucky' scale.

I have a lot of constraints, so I'm not sure there's a saving account out there for me, which is why I need some advice. Hope someone can help
Sincerely
Neil

HappyMJ

You can max out all the regular savings accounts and open all of the high interest current accounts. The lowest interest you will get is 3% and up to 6% on some of the money.

It's a little time consuming so try and open about 1 account per week and by the end of the year you should have quite a collection of accounts earning some good rates of interest.

When opening accounts be sure not to apply for overdrafts as this may affect applications for credit when you buy the house.

If you are a little short of funds you can borrow money as an unsecured personal loan and use the money to buy the house. You don't need to provide as much proof of income to get an unsecured personal loan. You don't always need a mortgage.

savings_my_hobby

http://www.moneysavingexpert.com/savings/best-regular-savings-accounts

http://www.moneysavingexpert.com/savings/savings-accounts-best-interest

here are two links that should help.

if you are unsure about anything just ask.

p.s if you are looking to maximise your interest returns then you will need more than one account. There is no magic bullet at this time i'm afraid.

Neil_42

Thanks for your help guys, it's much appreciated. I'll think about the multiple accounts and plan my savings attack like a military campaign. I think the problem I have, like many people except the young, is that I think about banking as a static, unbending supplier of a reliable service, not as they have become, a retailer of products designed to bamboozle and prevent people from saving money. I need to break this thought process and adapt to the current landscape, I think once I open the first new account with a different bank/company that mental block will break and I'll happily open a variety of accounts, it just seems very strange and alien even thinking about doing it that way. I need to get in the game!

Robbieh

Hi, I was just like you until I opened my first 5% account. Once you become used to doing this and shifting the monthly payment in and out, you'll quickly add more and soon will have a few accounts and regular savers. I was stuck in a rut with money in Premium Bonds until I read Martin's article on them. It's taken me to being 65 before I took the plunge and now have 10 accounts, 2 reg. Savers and am in the process of switching to FD for the £150 and another RS. It's very therapeutic I find and making more money than my bonds ever did for 5 yrs.
Good luck and have fun.
Rob.

Eco_Miser

Neil_42 wrote: »

Hello, I've recently started earning a good income and wanted to start saving in a high interest account, but from what I've gathered this is far more diffuclt than it used to be back in the day. Here is what I'm looking to do:

- Save up to 4 to 6k a month for a year or two where I will then attempt to buy my first flat/home for about 100k.

You're going to run out of the good payers long before that, unfortunately.

Neil_42 wrote: »

- Start saving again after purchased first home for the next rung on the property ladder.

Leave the accounts open, ready to be filled up again.

Neil_42 wrote: »

- I'm looking for a 1 to 2 year account, fixed rate interest of about 4 to 6% pa, although all the highstreet accounts are valid for 1 year and have a £250 to £400 limit per month on what I can save (as far as I can tell that's the case anyway).

Nationwide has a £500 limit, plus £2500 in the current account.

Neil_42 wrote: »

- I don't want to invest in stocks and shares or property due to the current predications of a UK housing bubble and second big crash,

Investing for two years isn't recommended anyway.

Neil_42 wrote: »

also I don't want to put my money at risk and need it covered by the 75k protection in case the company it's with goes bust.

So far it looks like I'll need to have 3 highstreet accounts which would need changing to 3 different banks/institutions after a year,

No, we're expecting the regular savers to still be available, you just open a new one with the same bank (or in some cases, I think, continue with the existing, after the accumulated contents have been dumped elsewhere).
The current accounts, except Nationwide, have no explicit time limit on their high interest earning potential, although the banks could just give 60 days notice of a rate change.

Neil_42 wrote: »

and even then I can only put in around 1k a month, which is not what I'm looking for, or am I missing something?

Yes, how many such accounts there are. I count £2450 per month in the link below. There are others at lower rates.

Neil_42 wrote: »

What I think I need is two accounts in two different banks which accept 2 to 3k a month for savings @ the highest interest rate available. But do these type of accounts even exist?

No, you'll have to use more accounts.

Neil_42 wrote: »

I did think about premium bonds, but they're only 1% interest if you're 'average' on the 'lucky' scale.

NS&I have better accounts than that, although not as good as last time I looked, 1.25%

Neil_42 wrote: »

I have a lot of constraints, so I'm not sure there's a saving account out there for me, which is why I need some advice. Hope someone can help
Sincerely
Neil

A list of the worthwhile accounts. There are conditions to meet for all of these accounts, but they're fairly easy, and can mostly be automated.

Neil_42 wrote: »

I'll think about the multiple accounts and plan my savings attack like a military campaign. I think the problem I have, like many people except the young, is that I think about banking as a static, unbending supplier of a reliable service, not as they have become, a retailer of products designed to bamboozle and prevent people from saving money.

Well, I've been moving my money to where the interest is for the past 35 years. There's been a twist since the credit crunch that it's current accounts, not savings accounts that pay best, but otherwise business as usual.

colsten

Neil_42 wrote: »

- I'm not looking to invest in a pension until I've secured my first home.

This isn't necessarily a good move. If your company has a pension scheme, you'd lose out on all the company contribution.

enthusiasticsaver

You will have to open up quite a few current accounts and regular savers to accommodate that sort of money every month. Nationwide, TSB, Lloyds, M and S, FD and HSBC are the regular savers but even using all of those the maximum you can put in every month is £1950 if it is just you and you don't have a partner. You will have to put the rest in current accounts and fill them up gradually. Some of the current accounts you will need to open to get the regular savers so start off with Nationwide, TSB, Lloyds, Bank of Scotland(maximum 3) , Tesco (maximum of 2) and Santander 123 until they are all full. At the end of the regular saver period you will need to find somewhere to put it all then you start again the following year. If you are looking to buy a house and are a First Time Buyer open a Help to Buy ISA with Halifax at 4%.

Neil_42

Thanks eveyerone. I will definately take into consideration everything you have all said, if I find I am able to set up the accounts without it being too time consuming, going from all your advice, this is clearly the way to go.