£5k to invest

30andcounting

Long time lurker but first time poster...go easy!

I have a bonus coming up at work c£20K-£40k I want to put some aside for a rainy day, or I think the term is an emergency fund. Some of the money is going towards an extention on our house. I've decided I want the emergency fund to be around the £5k mark, I want it to be easy access should I need it.

I was thinking about putting it in an easy access saver and looks like the best rate I can get is 1.5% - whats peoples opinions? I plan to set up a standing order of £100 a month to keep topping it up over time.

We dont really have any debt or any savings as such, we have put a lot of money into our house and recently had a baby (money pit) so keen to build some savings up. I earn £57K and my partner £10k. Our bills are approx £1,200 a month.

Appreciate thoughts - thanks

eskbanker

It would normally be suggested to have an emergency fund equivalent to 3-6 months worth of earnings or income - although you say bills are £1,200 a month there are presumably plenty of other costs that you need to fund if, say, you lost your job? Take-home pay (joint) is presumably in £4K/month territory so if you're only thinking of saving £100 of that, that's quite a big gap, so I'd suggest a larger emergency fund than £5K.

Do you have a mortgage? It may be worth paying some of that off, especially if the rate is higher than you'd earn in savings.

Also pensions? I appreciate I'm not specifically answering your question of where to put £5K for easy access (check bank accounts and regular savers via https://www.moneysavingexpert.com/savings/which-saving-account/), but would suggest that a decent bonus is a good time to consider your broader financial situation....

xylophone

How about a TSB Classic Plus for you and your wife and a joint?

This would give you 5% on £4500 - don't forget to set to paperless - the monthly pay in can be done by internal matching same day standing orders.

Then (if you haven't already had ) what about Nationwide Flexdirect accounts (sole and joint) for you and spouse?

These must be externally funded but easy enough by matching same day in/out SO's from TSB to NW and back as above.

30andcounting

Thanks both - I was planning on starting with £5k as a lump sum then just adding £100 a month, I will be saving for other day to day stuff elsewhere. My idea is this emergency fund is hopefully never touched until retirement (just a financial buffer hence emergency)

If I was made redundant, then I would get 4 months pay plus stat redundancy c£20K gross and £2k tax free.
I will look into the classic plus thank you.

Kernel_Sanders

xylophone wrote: »

How about a TSB Classic Plus for you and your wife and a joint?

I really don't think you should be advising the OP to be spending his money on cannabis.

dont_use_vistaprint

You can have £4K across TSB classic plus (£1500 @ 5%) & nationwide flex direct (£2500 @ 5%) , both pay monthly interest. You can then also deposit an extra £500 a month into the two linked savers - Nationwide flex regular saver (5%) & TSB monthly saver (2%), which pay interest annually. More if you want to have multiple/joint accounts, then anything extra can go into Marcus at 1.5%.

Petty your bonus wasn't a week earlier, would force the right decision!!!! on £57K basic you'd have lost 40% of it, plus 100% of your child benefit for 18/19 as it takes you over £60K.....So even more of a money pit :-) . I was sensible & put mine into pensions - £5K into a employers pension and £5K into an H&L SIPP online, which I think gained over £2,500 immediately through tax relief.

ScoobyZ

Kernel_Sanders wrote: »

I really don't think you should be advising the OP to be spending his money on cannabis.

Brilliant, made me lol!

xylophone

I really don't think you should be advising the OP to be spending his money on cannabis.

Lessens the pain!:)

will-he-payitoff

You havent said how old you are, if you are both under 40 you could put 4K each into a LISA.

Friday1989

But if you need to take it out there's a penalty so you won't get the whole amount back.