Short Term Saving for 25k

KeyJ

Hi,

I'm looking for the best place to save £20k to £25k for a period of 6 months, as I have plans for the cash.

Does anyone have any suggestions?

Thanks!

aj23_2

KeyJ wrote: »

Hi,

I'm looking for the best place to save £20k to £25k for a period of 6 months, as I have plans for the cash.

Does anyone have any suggestions?

Thanks!

You could switch to Santander's 123 account and get about £30-£40 a month on up to £20k. But there is a £5 fee a month, so when you take it back out it might cost you money. A lot of easy access savings account which pay a 'decent' rate are usually for one year, and if you withdraw early then you won't get the interest of a full term. I'd look on Top Savings Accounts, as you don't want to get locked into any restricted accounts. Basic easy access accounts will give you next to nothing.

You could switch to a CA which pays you to switch too.

xylophone

http://www.thisismoney.co.uk/money/article-1583859/Best-savings-rates-General-savings-Internet-branch.html

Have you ever had a Nationwide Flexdirect account?

Do you have 6DDs? You might open a couple of Tesco current accounts.

You might open a TSB Plus account.

The above would give you a reasonable rate on £10,000.

You would cycle in/out the required monthly inputs.

aj23_2

xylophone wrote: »

http://www.thisismoney.co.uk/money/article-1583859/Best-savings-rates-General-savings-Internet-branch.html

Have you ever had a Nationwide Flexdirect account?

Do you have 6DDs? You might open a couple of Tesco current accounts.

You might open a TSB Plus account.

The above would give you a reasonable rate on £10,000.

You would cycle in/out the required monthly inputs.

I had a Flexdirect and it paid me out £125 over 12 months, as I kept the max. in their at all times. Got between £10/£11 a month. So for 6 months you'd get about £60.

I have a Tesco CA, and it pays me the max. £7.50ish a month. So about £60 (or £240 if you have enough direct debits for four accounts) for 6 months.

TSB will give you hardly anything for 6 months as it's only on balance sup to £1500.

I'd say Santander 123 would be best CA option.

YorkshireBoy

aj23 wrote: »

You could switch to Santander's 123 account and get about £30-£40 a month on up to £20k.

But you're including £5 to £15 a month DD cashback in that figure. Anyone making £15 a month cashback must have a Santander mortgage (or very large bills!). I make less than £5/mth with mine...and I pay a bill in all categories except mortgage.

Basic easy access accounts will give you next to nothing.

There's at least 2 "basic easy access accounts" paying 1.3% AER...and they'd deliver more than Santander without cashback generating DDs over the OP's 6 month timescale. So why would you suggest switching to Santander?

ValiantSon

KeyJ wrote: »

Hi,

I'm looking for the best place to save £20k to £25k for a period of 6 months, as I have plans for the cash.

Does anyone have any suggestions?

Thanks!

aj23 wrote: »

You could switch to Santander's 123 account and get about £30-£40 a month on up to £20k. But there is a £5 fee a month, so when you take it back out it might cost you money. A lot of easy access savings account which pay a 'decent' rate are usually for one year, and if you withdraw early then you won't get the interest of a full term. I'd look on Top Savings Accounts, as you don't want to get locked into any restricted accounts. Basic easy access accounts will give you next to nothing.

You could switch to a CA which pays you to switch too.

This advice isn't quite right. Santander 123 will pay 1.5% AER (1.49% gross) on balances up to £20,000. This would mean that with the full £20,000 in you would earn £24.83 each month, not £30-£40.

There is a £5 fee each month, although most people significantly reduce, or negate, this with the cashback paid on their utility bills. The effective interest rate is dependent upon how much cashback you earned. If your cashback earned £5 each month then you would get the full 1.5%, but if there was no cashback then you would only effectively get 1.19% interest.

It would cost you absolutely nothing to withdraw money from the account, even if it was the full balance. The monthly fee is charged each month and paid out of your account. Taking your money out costs nothing!

Honestly, for only a six month period, I wouldn't necessarily bother with Santander 123, unless you intended to continue to operate it as your main account for the cashback, but if you did that then I'd suggest downgrading the account after those six months to 123 Lite, which doesn't pay any interest, but still pays the cashback for only a £1 per month fee.

Other possibilites depend on how much effort you want to go to. A combination of the interest paying current accounts would be your best bet, but as these only pay interest on limited balances to get the most from £20,000 would require you to open several (although this is entirely possible and a number of people do it, but it does take a little bit of management). Have a look here for details on interest paying current accounts: https://www.moneysavingexpert.com/banking/compare-best-bank-accounts#interest

For acuracy's sake, other misleading figures you have been quoted:

Tesco pays 3% AER (2.96% gross) on up to £3,000, which equates to £44.40 over six months, not £60.

Nationwide FlexDirect Pays 5% AER (4.89% gross) on up to £2,500, which equates to £61.13 over six months (to be fair, this one was about right).

TSB pays 3% AER (2.96% gross) on up to £1,500, which equates to £22.20 over six months, rather than, "hardly anything". (If you are looking for the best return then £22.20 is better than nothing).

As YorkshireBoy has said, there are easy access accounts that do actually pay a reasonable amount (given the current market), rather than, "next to nothing". ICICI Bank pays 1.35% AER, while Tesco pays 1.3% AER.

You could also potentially make use of the regular savers that Santander and Nationwide offer (if you had a 123 or 123 Lite account for Santander, and a FlexDirect account for Nationwide), because these regular savers allow you to withdraw money early without penalty. They both pay 5% on monthly deposits of £200 for Santander and £250 for Nationwide. The result after six months would be:

Santander = £17.23 interest
Nationwide = £21.53 interest.

YorkshireBoy

aj23 wrote: »

I have a Tesco CA, and it pays me the max. £7.50ish a month. So about £60 (or £240 if you have enough direct debits for four accounts) for 6 months.

£7.50 x 6 = £45

£7.50 x 6 x 4 = £180

How would the OP (they say "I'm" and "I") get 4 accounts when the max is 2 per person?

aj23_2

YorkshireBoy wrote: »

But you're including £5 to £15 a month DD cashback in that figure. Anyone making £15 a month cashback must have a Santander mortgage (or very large bills!). I make less than £5/mth with mine...and I pay a bill in all categories except mortgage.There's at least 2 "basic easy access accounts" paying 1.3% AER...and they'd deliver more than Santander without cashback generating DDs over the OP's 6 month timescale. So why would you suggest switching to Santander?

My parents have this account and don't have a mortgage. But obviously yes the DD cashback would increase it, but I was talking just about the interest here on the cash balance.

Erm, I gave examples in the Top Savings Accounts which pay 1.35% as an option, didn't you see that? And by "basic easy access accounts" I mean the ones which pay between 0.10% and 0.50%. But you're forgetting this is only for 6 months, so Santander could be an option, which is what the OP asked for, so I gave some. Why are people so tetchy on here.

aj23_2

YorkshireBoy wrote: »

£7.50 x 6 = £45

£7.50 x 6 x 4 = £180

How would the OP (they say "I'm" and "I") get 4 accounts when the max is 2 per person?

Oh yes I forgot that! Well maybe the OP is partnered and could split it, I don't know. Couples or joint account holders can have 4 between them.

msallen

aj23 wrote: »

I was talking just about the interest here on the cash balance.

Oh OK. In that case you were wrong.

aj23 wrote: »

Why are people so tetchy on here.

I give in. Why do some people here give out incorrect information?

aj23_2

ValiantSon wrote: »

This advice isn't quite right. Santander 123 will pay 1.5% AER (1.49% gross) on balances up to £20,000. This would mean that with the full £20,000 in you would earn £24.83 each month, not £30-£40.

There is a £5 fee each month, although most people significantly reduce, or negate, this with the cashback paid on their utility bills. The effective interest rate is dependent upon how much cashback you earned. If your cashback earned £5 each month then you would get the full 1.5%, but if there was no cashback then you would only effectively get 1.19% interest.

It would cost you absolutely nothing to withdraw money from the account, even if it was the full balance. The monthly fee is charged each month and paid out of your account. Taking your money out costs nothing!

Honestly, for only a six month period, I wouldn't necessarily bother with Santander 123, unless you intended to continue to operate it as your main account for the cashback, but if you did that then I'd suggest downgrading the account after those six months to 123 Lite, which doesn't pay any interest, but still pays the cashback for only a £1 per month fee.

Other possibilites depend on how much effort you want to go to. A combination of the interest paying current accounts would be your best bet, but as these only pay interest on limited balances to get the most from £20,000 would require you to open several (although this is entirely possible and a number of people do it, but it does take a little bit of management). Have a look here for details on interest paying current accounts: https://www.moneysavingexpert.com/banking/compare-best-bank-accounts#interest

For acuracy's sake, other misleading figures you have been quoted:

Tesco pays 3% AER (2.96% gross) on up to £3,000, which equates to £44.40 over six months, not £60.

Nationwide FlexDirect Pays 5% AER (4.89% gross) on up to £2,500, which equates to £61.13 over six months (to be fair, this one was about right).

TSB pays 3% AER (2.96% gross) on up to £1,500, which equates to £22.20 over six months, rather than, "hardly anything". (If you are looking for the best return then £22.20 is better than nothing).

As YorkshireBoy has said, there are easy access accounts that do actually pay a reasonable amount (given the current market), rather than, "next to nothing". ICICI Bank pays 1.35% AER, while Tesco pays 1.3% AER.

You could also potentially make use of the regular savers that Santander and Nationwide offer (if you had a 123 or 123 Lite account for Santander, and a FlexDirect account for Nationwide) because, these regular savers allow you to withdraw money early without penalty. They both pay 5% on monthly deposits of £200 for Santander and £250 for Nationwide. The result after six months would be:

Santander = £17.23 interest
Nationwide = £21.53 interest.

I've had the Santander 123, the Nationwide Flexdirect and the Tesco Current Account. I know what they all generate. No need to explain.

I never said closing with Santander 123 would cost money, so you're wrong there. I said if you withdraw the money and keep the account open, it would cost you, which is true, as you are charged £5 a month regardless of the balance. If you're relying solely on the interest on the cash balance, you need at least £4k for it to generate a profit for it. And you can't say my 'advice' of £30-£40 isn't quite right, because it's fact and I know it first hand. So you're wrong here too.

And of course you wouldn't do 123 for 6 month, because I suggested it as an option. What a surprise.