Savings and where to start?

AuroraPink88

I need some help. I am not a good saver but I have recently received my inheritance. A small chunk is going to go to my daughter but I don't know where is best to save it and I don't know where to put the rest as I have no immediate plans to use any of it. I want a good interest rate but I don't understand what an ISA is, what a fixed bond account is and the rest. Can anyone help please? I want to make the most of this money

Thanks

HappyMJ

AuroraPink88 wrote: »

I need some help. I am not a good saver but I have recently received my inheritance. A small chunk is going to go to my daughter but I don't know where is best to save it and I don't know where to put the rest as I have no immediate plans to use any of it. I want a good interest rate but I don't understand what an ISA is, what a fixed bond account is and the rest. Can anyone help please? I want to make the most of this money

Thanks

ISA's don't pay much interest.

The easiest option is a Santander 123 account paying 3% interest on £20,000. Once you've got the money in that then you can look at better options paying up to 6%.

Fixed bond's don't pay much either. You would take them out only once you've filled all the high interest current account options.

Pay off any credit cards, loans and mortgages....

You could consider making higher pension contributions from your income and use the money to live off.

AuroraPink88

I don't have £20,000. I have just over £2600 and I no credit cards, loans or mortgages to pay off. I just want to keep the money safe and tucked away for a rainy day

BUKI_2

AuroraPink88 wrote: »

I don't have £20,000. I have just over £2600 and I no credit cards, loans or mortgages to pay off. I just want to keep the money safe and tucked away for a rainy day

you don't have to have 20K, the Santander 123 Acc. offers an interest payment from 3k to 20k.
Bearing in mind, some banks require you to pay in a minimum amount of money.


TESCO for instance does not have such requirements.

polymaff

AuroraPink88 wrote: »

I don't have £20,000. I have just over £2600 and I no credit cards, loans or mortgages to pay off. I just want to keep the money safe and tucked away for a rainy day

As mentioned by BUKI, a single Tesco bank account will pay, currently, 3% AER on up to £3,000. If you are ready for a bit of legwork (each month pay in and then immediately withdraw £500), open a couple of paperless TSB Classic Plus Accounts. Up to £2,000 in each with, currently, a 5% AER.

bigadaj

AuroraPink88 wrote: »

I don't have £20,000. I have just over £2600 and I no credit cards, loans or mortgages to pay off. I just want to keep the money safe and tucked away for a rainy day

High interest current accounts are the best option currently, though Santander 123 is one of the worst options available.

A good start is a tsb current plus account, pay in £500 a month from your current account and pay it back, either manually or by standing order, and you'll get 5% interest on £2000. You also get 5% cashback on contactless debit card payments up to £100 a month, ie £5 a month. It also has a regular saver which pays 5%. After filling those look at nationwides flex direct account and their regular saver.

Dird

bigadaj wrote: »

High interest current accounts are the best option currently

This is for your money OP. Put your daughter's in a child ISA that is impossible for you to access

Frozen_up_north

The Santander 123 account is only viable with a balance in excess of £8000-£9000, otherwise the monthly charge negates the interest earned.

The TSB Classic Plus gives 5% on balances up to £2000. The TSB staff are very welcoming. You need to pay £500 in per month, which can be done by standing order to shuffle money to/from other accounts, if necessary.

You need to be well disciplined to avoid eating away at money in current accounts, but the interest is higher than most "savings" and ISA accounts.

We have both Santander 123 and TSB Classic Plus accounts, no issues with either bank.

xylophone

open a couple of paperless TSB Classic Plus Accounts.

A customer is now only allowed two accounts if one of them is joint.

If the OP has £2,600, she could open one TSB ( and remember to go paperless) and one Nationwide Flexdirect and deposit £1300 in each.

She would set up a SO for £1000 from TSB to Nationwide and one for £1000 from Nationwide to TSB for the same day each month.

When the 5% year for NW comes to an end, she can transfer enough to make up £2000 to TSB and the balance to a Tesco current account - she then sets up a SO for £500 from Tesco to TSB and one from TSB to Tesco for the same day each month.

She moves the interest accruing in TSB to Tesco once a month.

Eco_Miser

Or, £2000 into TSB Classic Plus, £250 into TSB Regular Saver, another £250 the following month, £100 (or more) the month after that, and £25 (or more) each subsequent month for the rest of the year, running down the balance in the current account as necessary. The £100 and £25 could be more if the OP decides to save extra from their income.

bigfreddiel

The best place to start is to cut out buying STUFF that you don't need. Cancelling direct debits to memberships you never use, ditching expensive mobile phone contracts for smartphones you don't need.

That will get you on the road to saving

fj