£6000 to save in 30 months-best method of saving?

poshandspecs

I've made a balance transfer of £6000 using the Virgin 0% card to buy a new bathroom 🛀 So, I have 30 months to save to pay it back. Suggestions for the best method of saving (plan to put aside a set monthly amount) very welcome! Thanks in advance 👍🏻😬

YorkshireBoy

The simple answer to your question is to put it in the regular savings account that pays the highest interest rate, and then do the same in years 2 & 3. What has your own research thrown up so far?

Anyway, you'll start off by repaying £60 a month, but this will reduce as the balance decreases (as it's 1% of the outstanding balance).

So how much, on top of this amount, do you "plan to put aside" each month?

poshandspecs

Thanks YorkshireBoy. I have been looking at regular savings accounts but those with the highest interest require you to open a current account too. I already have a current account with Santander that pays 3% so don't want to switch. Planning to set aside £150 pcm. Might just leave it in Santander but would prefer to save it separately.

YorkshireBoy

poshandspecs wrote: »

I have been looking at regular savings accounts but those with the highest interest require you to open a current account too.

The highest pays 6% AER. You can get a current account or two that will pay 5% AER, ie just need one account, not two.

I already have a current account with Santander that pays 3% so don't want to switch.

Why would you think you have to "switch" accounts? Just open one of the 5% accounts and put your money in it! TSB needs £500 a month, so just pull back £350.

Might just leave it in Santander

...and make 3% instead of 5%? That's just over half the return you could get elsewhere!

but would prefer to save it separately.

Somewhere like a 5% paying current account or two perhaps?

LXdaddy

If it was me.. I would open a regular saver account with First Direct paying 6%. Put £300/month into it via a new linked FD current account. end of the year you would have £3,600 plus interest. Move that to a new current account paying 5% and then repeat the process for another year. You would then have more than the £6,000 you need to pay of the balance at the end of 30 months.


You will be "saving" more than you need but you should be able to fund that by taking some of the money in your 123 account currently earning 3% and make it work at 6% or 5%.


You don't have to switch from Santander to open a new current AC with First Direct or any of the other interest paying banks.




With Current accounts paying more than Savings accounts it makes sense to have multiple Current accounts.

poshandspecs

Thanks YorkshireBoy and LXdaddy, looks like current accounts are the way to go!