Making the most out of lump sum/monthly savings

T1T2T3T4

Hi there,

I would really appreciate some help on how best to make the most interest out of our current situation. We're both have no idea what to do/where to start.

- married couple
- saving for first time home towards the end of 2020
- basic individual current accounts
- Monzo joint account for bills and shared spendings
- currently a joint lump sum of 10k
- an individual lump sum of 6k
- and we're putting aside a further 2.2k a month

Any advice/product recommendations on how to get the most money out of our situation? I also wonder if we need a better account for our bills/spending rather than a Monzo, so maybe a cashback one?

Thanks in advance!

kuratowski

If you can wait a year, you should both open cash LISAs and fully fund them this tax year and next to get £4000 free from the government.

For the rest of your cash, there are various ways to maximise your interest - take a look at the regular savers (see the sticky thread) and the current accounts paying interest (e.g. Nationwide 5% on £2500 in first year - for more, look at the MSE current accounts guide).

Or if you're really lazy and don't want to split your cash into lots of small pots, just stick it in the top paying savings account (I think Shawbrook - but check the MSE savings accounts guide).

T1T2T3T4

Hey, thank you for replying. I think the aim is to buy this year, October time roughly. Are there any other options do you think? I read about drip feeding accounts, so maybe having a current account with interest and then drip feeding it in to saving accounts? That's all I can think about. Then I'll just have to research the top ones.

colsten

The harsh reality is that you won't be able to make lots from interest with the sums you mention, and considering your short-term need for the cash.

You could make a few quid in cashback from a 1-2-3 Lite account.

You could also make more significant cash from current account switching, making use of referrals where offered. The Nationwide FlexDirect account could be nice, and would yield more than a cashback account (interest and referral money)

Dripfeeding is really all about Regular Savers, and you generally have to lock up your money for 12 months.

There are lots of useful articles on banking and savings on the main site.

But unless you have already sorted your mortgage, you might want to hang on with applications for current accounts until the mortgage is approved. Current account applications are applications for credit, even if you don't ask for an overdraft.

T1T2T3T4

Hi. When you said "If you can wait a year, you should both open cash LISAs and fully fund them this tax year and next to get £4000 free from the government." I read it as another year. But if it's just one year to wait then that might be doable. Can both of us use our individual LISAs towards one house?

Yes I am currently reading the articles, lots to think about! Yes the interest won't be huge amounts, but it will be free money and every little helps at the mo.

Will 1 or 2 current account applications affect us when we go for a mortgage? We won't be doing that until the end of the year anyway but if it does, it might be something to consider before we do.

T1T2T3T4

I'm reading the articles and i'm getting more confused about the differences between the different types of accounts and where to start

xylophone

You might consider a standard 123 account and make sure that all the cashback DDs are on it.

The cashback might well cover the fee in which case you would receive 1.5% on up to £20,000. https://www.santander.co.uk/personal/current-accounts/123-current-account

If you/spouse have never had the Nationwide Flexdirect account, you
might consider one each and a joint which gives the 5% for a year on up to £2500.

See https://www.nationwide.co.uk/products/current-accounts/landing-page/flexdirect?cmpid=PPC_1_1_71700000047570365_nationwide+flexdirect+account&ds_rl=1235563&gclid=EAIaIQobChMIvP7Ova335gIVi7TtCh2jRworEAAYASAAEgKGbPD_BwE&gclsrc=aw.ds

colsten

T1T2T3T4 wrote: »

Can both of us use our individual LISAs towards one house?

Read this: https://www.moneysavingexpert.com/savings/lifetime-isas/

T1T2T3T4 wrote: »

Will 1 or 2 current account applications affect us when we go for a mortgage? We won't be doing that until the end of the year anyway but if it does, it might be something to consider before we do.

If there's a clear 6 months between your current account application(s) and your mortgage application, then it shouldn't matter

T1T2T3T4

Thank you, yes just read about the LISAs now. Where would you start for savings for less than a year? Just stick it all in one account or would you both moving around the money in and out of different regular saving accounts etc?

colsten

Personally, I'd stick it all into a Marcus for now, load up 2 LISAs, and then refer the hell out of Nationwide and TSB accounts, for both of you. As soon as those accounts are live, I'd then load them up - £2,500 each into the FlexDirects, and £1,500 each into the TSB Plus ones. But then I am an experienced switcher, not afraid of exploiting every last written and unwritten rule, and I don't have to worry about any mortgage application. You should still be able to make at least £500 between the two of you from switching offers, even if you are approaching it quite conservatively.

T1T2T3T4

Ah thank you for that, helpful advice. We're just sitting here writing up a potential plan and I might post it here to get our guys' thoughts in a bit. But for now, is there a limit to how many regular saver accounts you open and, like current accounts, would opening one mean a credit application? Thanks again, really appreciate this.