Confusion Over Where To Place £16,000 Plus Regular Savings

Squirrelz92

I have spent the last few hours going backwards and fowards over all of this websites saving advice and I just cannot make a definite decision so I am asking for some advice

I have £16,000 left in savings after paying off my HP and placing £4,000 into my first LISA earlier on today. Come the 6th April I intend on placing another £4,000 of the above £16,000 into the LISA leaving me with a lump sum of £12,000 to shove somewhere else.
My problem is this. I am a regular saver with the intention of saving £700 a month for the foreseeable future so I need an account that I can deposit funds into regularly. I have no intention of withdrawing any of these savings as it will all make up a giant house deposit.
I've looked into many different options including the cash ISA's, Marcus, high interest current accounts etc but I cannot for the life of me work out which one or several would be best for my situation. Can anyone out there point me in the right direction? Many thanks!

jimbow25

Sounds like you have already done the research necessary to make a decision to be honest!


You will have the info over the advantages of each option closer to your finger tips than I do but why not put the maximum in to a high interest current account (3k or 5k or whatever it is) and the rest in Marcus or a straightforward cash ISA.


Use a fixed rate bond / ISA if you are 90% sure you won't need to touch that chunk of the money until you have achieved your savings goal - try and work out when that might be.


When I saved for my deposit I put £12k (coincidentally) in to a 3 year FRISA that only charged a £100 withdrawal penalty because I was sure I wouldn't need access for at least 2 years. In the end 3 years was perfect. That was with M&S money whose rates are awful now but weigh up the rate, vs penalty, vs your savings timeframe. I chose £12k because I knew I wouldn't spend that money soon without a radical change in circumstances (losing my job or serious illness).


Check the rules on the interaction of cash ISAs and Lifetime ISAs I am not familiar with these.


Use a spreadsheet or an online calculator to work out whether going for one or more monthly savers is worth it for the extra hassle. You could certainly use these for the "new" money.


Good luck.

xylophone

For £4000 of the £12,000 immediately ( and drip feeding of £250 a month) and savings rates information see post 4 here

https://forums.moneysavingexpert.com/discussion/comment/75605751#Comment_75605751

Do you live near a Virgin Money store? You can check out the Branch Regular saver - up to now there has been a new issue every couple of months.

There are 5% Regular Savers attached to HSBC Advance current account, First Direct current account and M&S current account - but first get your accounts - HSBC and FD can be picky about whom they'll accept and the M&S requires a switch and four DDs.

soulsaver

Also consider Nationwide ca 5% + 5% rs & TSB ca 5% for some of the balance, and if there is an OH you trust, consider use of those additional joint possibilities.

darkidoe

See Xylophone's link for the highest interest paying accounts you should be looking to use.

Make sure you have enough cash floating about in interest paying accounts for any emergency expenses so you are protected from having to access the ones in accounts you need to pay a penalty to access.

We can only point you in the direction, you will have to make the decision for yourself.

Squirrelz92

Thank you all very much for your advice on the matter.
I decided to deposit £10,000 into the best interest rate Cash ISA as I need consistent access to it to add funds over £300 into it every month. I got put off by opening one of the 5% current accounts as I would have to transfer all my bills/wage etc into the current to use the 5% account with the same company...not sure I could do that every few months so I went with the easier option for the time being. Once I am all settled and I have continued my research into the best way to save, no doubt I will end up going down the 5% interest account road for sure!

xylophone

I got put off by opening one of the 5% current accounts as I would have to transfer all my bills/wage etc into the current to use the 5% account with the same company.

If eligible, the NW Flex direct account (with associated 5% RS) and TSB Classic Plus accounts are easy options.

You do not have to switch, pay in your wages or pay your bills from the accounts.

You simply open the accounts and proceed as outlined in link in my post above.

jimbow25

gemmacampbell2019 wrote: »

Thank you all very much for your advice on the matter.
I decided to deposit £10,000 into the best interest rate Cash ISA as I need consistent access to it to add funds over £300 into it every month. I got put off by opening one of the 5% current accounts as I would have to transfer all my bills/wage etc into the current to use the 5% account with the same company...not sure I could do that every few months so I went with the easier option for the time being. Once I am all settled and I have continued my research into the best way to save, no doubt I will end up going down the 5% interest account road for sure!

Don't forget monthly savers though. These do not usually allow regular access in the sense of withdrawals but they are designed for saving out of your regular income. Some need a qualifying current account but not all. You might find you get 3-5% interest on that for a year instead of just 1.5%.