Savings advice

M_ahh_tt

Hi!


I've looked into savings and just want to be sure I'm going down a good route. I don't necessarily need the best %'s but don't want to miss out and there's so much out there! It used to be so much easier just finding the best ISA


I currently have no savings.
I can save £700 per month which I want to put £200 in a "Help to Buy" account with Halifax where I can get 4% interest. (If the rate drops can I just move it somewhere else in the same tax year?)
That leaves me £500 to play with each month.
I don't mind opening a few accounts to get good interest but do not like the idea of having standing orders paying money separate accounts to clear their deposit requirements.


I can deposit £1000 into an account each month. I do not pay many bills (So a 123 account doesn't seem worth it) and I don't need any free travel insurance deals etc


I'm currently with HSBC and can switch accounts for free £££ but I've been with them for over 10 years now and feel like my loyalty may serve be better down the line than a quick £100 now.


I plan to save up £1000ish and then open up my Help to Buy.


Any advice welcomed!

badger09

Start reading here, then come back with any questions

http://www.moneysavingexpert.com/savings/which-saving-account

Savingsideas

badger09 wrote: »

Start reading here, then come back with any questions


*** I cant post links***

I appreciate things regularly change which is why this whole MSE website/forum exists...

but...

WHY THE HELL DON'T THEY TEACH YOU THESE THINGS IN SCHOOLS?

I can still work out basic trigonometry or Pythagoras based crap which I haven't used since school. However I had no idea about compounding interest, APRs, AERs, ISAs, Personal allowances.

I guess this is stuff your parents are supposed to teach you along with the birds and the bees?
Oh well, I didn't get either of those talks. So now I'm here reading through all your guides trying to educate myself on life.

:T

LXdaddy

Savingsideas wrote: »

...

WHY THE HELL DON'T THEY TEACH YOU THESE THINGS IN SCHOOLS?

I can still work out basic trigonometry or Pythagoras based crap which I haven't used since school. However I had no idea about compounding interest, APRs, AERs, ISAs, Personal allowances.

Welcome and happy ready trying to catch up on all the essential learning


Here's a few hints to get you started




Compounding interest is the effect of interest you have earned then earning interest itself. Simple case £100 in an account earning 2% - at the end of the year the bank adds £2 of interest so now you have £102. At the end of year 2 you get some more interest but not just £2 on your original deposit, you get £2.04 because you get 2% of £102. The interest you earned in the first year earns interest in the second year.


APRs - the months between the MARs and the MAYs???


AER = Annual Equivalent Rate - is the annual interest that would give the same rate as a rate that is paid more frequently - so it takes account of the compounding that is going on. Take the Santander 123 account with a balance between £3,000 and £20,000 for example it quotes a 2.96% interest rate, paid monthly = 3% AER. Each month you get 1/12th of 2.96% interest. This is compounded over the year so you end up with the same balance as you would have done if you were paid 3% interest once per year.



ISA = an Individual Savings Account where the interest earned is not subject to income tax. There are limits to how much you can save each year into an ISA account.


personal allowance = a sum of money that you can have as income during a tax year that the government will not levy income tax on. Currently £10,600 this tax year - due to be £11,000 next year.




Sure you'll have more questions and will probably find more answers, the more you read on this forum.

Eco_Miser

You're with HSBC - open their regular saver, and put £250 a month in; open the First Direct Regular saver for the other £250 (you need to open the matching current account first). So that's £500 a month earning 6% AER.

There are other options but I think that one exactly matches your conditions, and pays the highest interest.
Open a qualifying FD saving account with £1 so you don't have to pay £1000 in each month.

P.S. Get the £1000 you want to put in the HTB ISA before doing this (it's just two paydays away).
You can make a start on opening the FD current account though.

PeacefulWaters

WHY THE HELL DON'T THEY TEACH YOU THESE THINGS IN SCHOOLS?

They never taught me how to put shelves up.

They never taught me how to change the oil on a car.

They never taught me to cook.

They never taught me how to chat up a girl.

They never taught me how to dance in a night club without looking a dork.

They never taught me how to haggle in Currys.

They never taught me how to remove woodchip from the walls.

Or how to replace it with blown vinyl.

They never taught me how to gloss my front door.

They did teach me that 3 is a bigger number than 2. And that 3% of £100 is £3 which is more money than £2.

They did teach me that "instant" means quick/immediate.

They did teach me what "regular" and "term" mean.

Eco_Miser

PeacefulWaters wrote: »

They never taught me how to put shelves up.

They never taught me how to change the oil on a car.

They never taught me to cook.

They never taught me how to chat up a girl.

The first three were available to me, preferred to do maths and science.
The fourth wasn't on the curriculum, but the opportunities were there.

I did learn how to shape iron using a forge, anvil and hammer, and how to cut a thread on nuts and bolts, also un peu French and Latin.

Learnt a lot about percentages, many of the examples were interest, and simple interest and compound interest, and even a bit about tax (which was out of date before I started earning).

If they don't teach these things now, what are they teaching instead?

bigadaj

Eco_Miser wrote: »

The first three were available to me, preferred to do maths and science.
The fourth wasn't on the curriculum, but the opportunities were there.

I did learn how to shape iron using a forge, anvil and hammer, and how to cut a thread on nuts and bolts, also un peu French and Latin.

Learnt a lot about percentages, many of the examples were interest, and simple interest and compound interest, and even a bit about tax (which was out of date before I started earning).

If they don't teach these things now, what are they teaching instead?

Cultural diversity, media studies and marketing I believe.

Poddly

Most young people would use Youtube videos to look up how to do most things these days. Or ask someone/ look it up in a book in the library/ do some research on relevant websites. You have to be prepared to put a bit of effort in not expect to be spoonfed!

In fact they are teaching 'finance' in schools, my son at secondary school knows what an APR is. My eldest has done a Finance AS Level/Diploma (compulsory in Lower Sixth in his school) and knows about mortgages, credit cards etc. even about Sharia savings accounts. It is not perfect, but it's a start.

jimjames

Savingsideas wrote: »

I appreciate things regularly change which is why this whole MSE website/forum exists...
but...
WHY THE HELL DON'T THEY TEACH YOU THESE THINGS IN SCHOOLS?

You can't expect schools to teach everything about life. Certain things you need to make some effort to learn yourself or accept that you need to pay a professional for advice.

Some jobs I will tackle myself, others I know someone can do better or more easily so I'm happy to pay them to do so. Each person is different where that scale lies. I'll happily service and maintain basics on my car but changing a cambelt is something I'll let a garage do. Personal finance I'm happy to do and learn but I use fund managers rather than trying to hold individual shares myself; others prefer to use IFAs to do a similar job.