Help for a saving newbie please!

lilmissmup

Trying to start saving for a deposit on the house and not sure what to do now!

Have applied for a HiSave account with ICICI and am due to send off my deposit cheque, was going to pay in £200.

But now i have seen the Esaver from Alliance & Leicester so i have applied for that too as rate is better and its long term saving i want anyway so the fact the bonus rate drops after 14 months doesn't really bother me and i won't be withdrawing anything until i buy a house so not worried about the interest being taken off the month you withdraw.

I also have my current account with them, joined them in May and had no problems and trust them.

BUT....

Do i also keep the ICICI account open and just deposit a bit into that as there BOE rate is guaranteed for longer or just email them to cancel that application and wait until the 14 months is up at Alliance and Leicester and move on? Unless something even better comes along in the mean time!

Liz_the_Whizz

Have you used up your £3k cash ISA allowance for this tax year yet?

If not, that should be your priority for now.

If you have, I'd go for what you have suggested - open the e-Saver with A&L but make a note to review the situation in Jan 2009 ready to move it out on 1 Feb 2009 when the bonus ends.

You may as well go ahead with the ICICI account in any case as it keeps your savings options open.

ray123

There is an article on thissite about the best savings rates, sainsburys is about 6% pre tax, but there are some for about 6.5%.

If you want to get cashback from everything you spend, either get a credit card egg/morgan stanley should still give 1%. Just make sure you set standing order to pay the full amount each month.

Also, open a halifax cashback current account, and you will receive 1% on all spending (not on cash withdrawals or standing orders!!! otherwise you would make a million in no time...)
One stiipulation, you must pay £1000 per month, it might need to be your wages!
It is one to look at, you can make a bit of money each year!!

Good luck.

lilmissmup

Liz_the_Whizz wrote: »

Have you used up your £3k cash ISA allowance for this tax year yet?

TBH i don't know i i will manage £3k by April now, is it worth opening an ISA anyway?

Liz_the_Whizz

IMHO it's still worth it, even if you are only using the ISA as a regular saver in effect.

On the A&L top paying e-Saver, the gross interest rate is 6.5%, so after tax that's 5.2% net interest assuming you are a basic rate taxpayer.

Compare this with say the Kent Reliance ISA (opening balance £1) which pays 6.21% tax free.