What option is best for me?

edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings
8 replies 1.2K views
Stevo_safcStevo_safc Forumite
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edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings
Hi, I've recently received a decent amount of money and I plan on investing it in a help to buy ISA.

Obviously with a help to buy ISA I can only put £200 a month in (extra £1000) in the first month, so I want to put the lump sum into a savings account in the meantime to earn a small amount of interest as well as keeping it separate from my current account.

This savings account will need to have unlimited withdrawals/transfers because I'll be transferring it from the savings account to the help to buy ISA monthly.

Which savings account and help to buy ISA will be the best option for me in terms of flexibility and return from interest.

I hope I've provided sufficient information and I'd be really grateful if somebody could help me.

Replies

  • jimjamesjimjames Forumite
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    Depends on amounts but unlikely to be a savings account as best option. Use regular savers and current accounts to get best returns.
    By the way you're not investing but saving, investments would have chance of going down as well as up which isn't suitable for saving for a deposit.
    Remember the saying: if it looks too good to be true it almost certainly is.
  • If your windfall is more than £75k put it into an ns&i income bond. Okay it's only 1%, but it's safe and easy access.

    Then you could start the great high interest accounts process, but I don't think these rates will last much longer, 5% is probably the highest, but it's only on a small amount like £2k.

    If you have at least five years before you need it, open a stocks and shares account and ISA and fund a nice balanced portfolio.

    And/or fund your pension or open a SIPP and fund that, now that is long term, locked away till you are at least 55, but maybe you are thst old already.

    Read the monevator web and good luck fj

    BTW beware of any cold callers trying to help you, they will all be scammers!
  • xylophonexylophone Forumite
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    How much is the "decent amount of money"?
  • Stevo_safcStevo_safc Forumite
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    Around £4000.

    I'm 23 so intending to move out with girlfriend in the near future.
  • Stevo_safc wrote: »
    Around £4000.

    I'm 23 so intending to move out with girlfriend in the near future.

    Open two TSB accounts that pay 5%, thst will take care of exactly £4K

    Cheers fj
  • xylophonexylophone Forumite
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    You will be transferring £1200 into the HTB ISA for the first contribution, leaving you with £2800 to drip feed.

    http://uk.virginmoney.com/savings/find/help_to_buy_isa/overview/ might suit.

    Why not open a Tesco current account, deposit the £2800 in that and drip feed the HTB from it.

    You would be earning 3% interest in Tesco paid monthly.
  • xylophonexylophone Forumite
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    Open two TSB accounts that pay 5%, this will take care of exactly £4K

    As I read it, he'll be using £1200 right away as above.

    He may not wish to put any of the windfall into the girlfriend's name.

    He could open a TSB Plus (£2000 @5%) and a Tesco (£800 @ 5%) and drip feed from first one and then the other.

    However, the TSB may not remain at 5% for very long and even if it does, he would still need to remember to cycle in £500 a month to comply with the T&Cs for earning interest.

    Therefore, just opening the one account would be the simpler solution.

    That said, if he is prepared to go the extra mile, opening the two accounts would pay the extra interest.
  • Stevo_safcStevo_safc Forumite
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    Great advice from bigfreddiel and xylophone.

    Yes that's correct xylophone, I'll be using the £1200 straight away and I've looked at the Virgin HTB already.

    I just want to keep things in my name for now so I think I'll opt for the Tesco current account and drip feed as you said.
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