Saving £1000 a month. But where can I put it?

TightMike

I'm at university and will be for the next 2.5 years. After I leave university, I plan on buying a house.

I already have a Help to Buy ISA earning 4%, 2x TSB current accounts earning 5% on £4000, a Nationwide current account earning 5% on £2500, and a Stocks and Shares ISA earning, right now, nothing.

All my savings accounts are full to bursting, and I don't want to put more money into my Stocks and Shares ISA because I might need access to the money in 2.5 years.

I will be saving around £1000 a month and would like a good return on those savings, but the fixed saving's interest rate is awful. I've looked at the Santander 123 account but it's not really worth it for me as I don't pay any household bills (I live with my parents). If it had stayed £2/month I would have probably gone there.

What other options do I have? Or is it just a matter of giving in and sticking the money in a 1.9% fixed rate interest account?

Thank you

ceredigion

Regular savers with TSB and Nationwide both @ 5%, probably easiest

TightMike

ceredigion wrote: »

Regular savers with TSB and Nationwide both @ 5%, probably easiest

I have thought about that.

Firstly, they only last 12 months. So in 12 months I'm going to have the same problem.

Secondly, I don't want to open too many accounts. I'd rather put it all into one account. I reckon I've opened about 12 bank accounts in the last 2 years so I'm wary it could affect my credit rating when it comes to getting a mortgage.

YorkshireBoy

TightMike wrote: »

Firstly, they only last 12 months. So in 12 months I'm going to have the same problem.

Nice problem to have though...with all that interest to come!

Secondly, I don't want to open too many accounts. I'd rather put it all into one account.

That will cost (more accurately, lose) you money.

I reckon I've opened about 12 bank accounts in the last 2 years so I'm wary it could affect my credit rating when it comes to getting a mortgage.

You're wary about the impact of some credit searches now on a mortgage application you're going to make in 2018/19? You've more important things to worry about, such as assembling the largest deposit you can over that timescale and passing your exams!

TightMike

YorkshireBoy wrote: »

You're wary about the impact of some credit searches now on a mortgage application you're going to make in 2018/19? You've more important things to worry about, such as assembling the largest deposit you can over that timescale and passing your exams!

What's the point in saving a massive deposit for a house, if no banks will give you a mortgage because of a poor credit rating? I get your point though. So you think it's not going to be a problem opening a couple more bank accounts?

ceredigion

TightMike wrote: »

I have thought about that.

Firstly, they only last 12 months. So in 12 months I'm going to have the same problem.

Secondly, I don't want to open too many accounts. I'd rather put it all into one account. I reckon I've opened about 12 bank accounts in the last 2 years so I'm wary it could affect my credit rating when it comes to getting a mortgage.

You said.


"I already have a Help to Buy ISA earning 4%, 2x TSB current accounts earning 5% on £4000, a Nationwide current account earning 5% on £2500, and a Stocks and Shares ISA earning, right now, nothing."


So the RS's aren't dependent on current account applications. So no impact on your credit file

planteria

TSB and Nationwide were my first thoughts too.. especially as you can put £500/m in Nationwide (TSB if £250/m)

HSBC/M&S/FirstDirect too... 6% for the latter too, and for the former too if qualify.

other choice is Lloyds. upto £400/m. 4% if you have a Club Lloyds account.

TightMike

Thanks for all your input. I've just opened up a Nationwide Regular Saver, so I'm all set up for another 12 months

jimjames

TightMike wrote: »

What's the point in saving a massive deposit for a house, if no banks will give you a mortgage because of a poor credit rating? I get your point though. So you think it's not going to be a problem opening a couple more bank accounts?

Do you think operating 5 current accounts sensibly and without going overdrawn for 4 years will reduce your credit rating? Or perhaps show that you can handle your money and improve it?

TightMike

jimjames wrote: »

Do you think operating 5 current accounts sensibly and without going overdrawn for 4 years will reduce your credit rating? Or perhaps show that you can handle your money and improve it?

Yeah you'd have thought. I was just going off of what people have said on HotUKDeals about constantly switching current accounts for the bonuses.

YorkshireBoy

TightMike wrote: »

Yeah you'd have thought. I was just going off of what people have said on HotUKDeals about constantly switching current accounts for the bonuses.

Bonuses and interest are different things though aren't they.

You're talking about maybe opening 3 more current accounts to get at 6% regular savers...a full 2.5 years before you're planning to go for a mortgage.

They're (HUKD) are presumably talking about changing your main account every few months...which WILL impact on the 'stability' aspect of any credit scoring carried out by a mortgage lender.

The fact remains that you could get all the current switching bonuses (£600-800?) inside 6 months...still leaving 2 years for this perceived damage to pale into insignificance.

And if the mortgage advisor/underwriters ask "what's all this current account activity about?", you reply, honestly, by saying "in saving for my deposit I became aware that current accounts paid more interest than savings accounts". Job done!?