where to save £200 a month ?

bertypreston

Hi,

this is my first post,hoping somebody can give me some straightforward advice,
id like to start saving £200 per month , but i dont know which is the best type of account ie ISA, regular savings etc,

id like to make as much intrest as possible and am not too bothered about being able to withdraw from it (unless its a real emergency)

have read some of the articles on the site but just got bamboozeled to be honest and would love it if people could suggest specific accounts and maybe explain the pros and cons very simplistically !

Thanks
Rob

Lazy_Runner

Hi and welcome to MSE.

My advice would be to build up the following pots of money in this order:

Sort out your pension contributions.

Then build up a rainy day fund equal to 3 - 6 months living expenses.

Finally I would look at medium to long term savings.

For the pension stuff you will get more comprehensive information on the pensions board.

For the Rainy day money I would look at a mini cash isa. See here:
http://forums.moneysavingexpert.com/showthread.html?t=164123
Suggest you read Martin's article and then the thread. Having said that, the National Savings Direct ISA is a top payer until March 2008.

Finally for the medium to long term savings, you are probably best off looking at investing in the stock market. You may want to post another question on this board when you are ready for that step.

HTH

LR

Lazy_Runner

Pro's of a mini cash isa is no tax is deducted, and you can get good rates. The downside is that once the money has been put into that account, that amount should be deducted from the limit of £3000. You can't put more in, even if you take some out in the meantime.

Pro's of a regular saver is the good rate of interest. Downsides are many which you would have to research. But amongst the downsides are: no/limited withdrawls otherwise lose top interest rate, limits on how much you can put in each month or a limit on the total you can hold in the account. More details here:
http://forums.moneysavingexpert.com/showthread.html?t=483531

Again HTH.

TomsMom

Your first choice should be an ISA. That will get you the best interest. You can put in £3,000 a year (as from next year £3,600) and the interest will be tax free. You can get over 6%.

I suggest you go to this thread on the ISA board http://forums.moneysavingexpert.com/showthread.html?t=401374
There is a list of the best paying ISAs.

Once you've maxed out your ISA then a monthly regular saver is a good choice if you're not bothered about withdrawing.

Then if you want an instant access account for some of your money Sainsburys Bank is considered a Best Buy at the moment.

bertypreston

thanks peeps

think ill go for ISA, checked the kink on tomsmom's reply and noticed the

BMW Savings Guaranteed Performance 1 year fixed rate ISA - 6.70% AER.

has the best rate, but from the name i guess you can only have it for 1 year (by then i should have 2400 saved)

where to then ?

wiseman405

http://www.nsandi.com/products/disa/index.jsp

I have gone with that one. But you will need £1000 for a deposit. After the tax year you can keep on ading. Not sure about the BMW one. Yes it has the best interest rate. But its best to read the small print or wait for another member to reply. Am a youngster so dont know much. But i know that link above is a good one Alot of people recommend that one.
Thanks
Tom

Aegis

Consider that there might be another BoE rate rise before the end of the year and decide for yourself if you want to fix your rate or go with a variable rate and hope it holds. Either is a fine choice, but you should think about it before you make your decision.

I managed to sneak into the Barclays Tax Beater ISA which I think is now cruising somewhere above the 7% level due to the rate rises since applying!