Not financially savvy and overwhelmed by choice!

ktd22

Having spent the last 24 hours reading every article on savings accounts I could find, I’m utterly perplexed and overwhelmed by choice - I wondered if anyone might be able to make a recommendation or point me in the right direction for the kind of savings account that might suit my partner and I.

We are trying to put some money aside having found out I am newly pregnant and as I am the main breadwinner, being aware that my maternity leave will present a number of challenges for us.

I will be on my usual, reliable, wage for the next 12 months so we will not need to access the savings within that period. However from that point we will need regular access to the savings to begin to top up each month as my income progressively goes down.

We will be looking to save between £100 and £500 a month between now and then, depending on when he is able to return to work (Covid permitting) and what his hours/tips look like each month (£100 should be a minimum). Ideally he would like to make weekly payments into the account.

The initial deposit will be £100 and we would want it to be a joint account so we can both contribute and withdraw when the time comes.

Im struggling to understand what each account will or won’t allow us to do, and how we can ensure we make the most of what could potentially be a limited amount (given the situation over the last year working in the hospitality industry, economic pessimism seems the most sensible approach)

Please forgive my ignorance, I have read the articles around easy access, regular and fixed savers but I’m struggling to make sense of it all! Can anyone make any suggestions based on our circumstances? 

Any advice gratefully received.

Many thanks

wannabe_a_saver

My first recommendation would be for you both to open regular saver accounts with RBS and Natwest.  You will need to open current accounts with them first if you don't already have them.  These accounts allow you to pay in £50 a month and get 3% interest, which is the highest on the market at the moment.   If you both have both accounts, that's £200 a month earning 3%. 

Then, both of you should also open Virgin Money current accounts.  In these, the first £1000 you keep in there will earn 2% interest.  This is the second best rate available at the moment.  Anything you an save in addition to the £200 you put in the regular savers you should put in your Virgin Current Accounts.  Once they are full with £1000 in each, you can open a second one each, this is perfectly acceptable and allowed by Virgin.  That will give you another £2000 allowance at 2%.  When those are full you can open a third account each.  Assuming no better options have come on the market by then!

These aren't joint accounts, but that doesn't really matter because if you split the money evenly you will both have equal access, and they are both very easily managed on apps where you can make instant transfers between yourselves as and when you need to.  You won't earn tons of interest in 12 months, but this is the best you'll do in the short term. 

Congratulations and good luck. 

jimjames

I'd certainly second the option mentioned for Virgin money above but I think adding more current accounts with other banks will over complicate it particularly when you've said you aren't financially savvy. The last thing you want is worrying about the number of accounts you have. The Virgin option will give you ability to save £1000 at 2% interest and a linked savings account if you have more than £1000. I guess it really depends if you'll be saving nearer to £100 per month or £500 whether that limit is exceeded quickly or not.

I'm perfectly happy to have multiple accounts open but seeing my wife struggle to get logins sorted this weekend so the accounts she has can be moved makes me realise that not everyone wants to have the level of involvement that I do.

tacpot12

With interest rates at such a low, I'm struggling to see the point of using a savings account at all. Even if you follow the advice above, you are going to be about £200 better off. 

You could just open a joint current account with a new bank and have just use this as your savings account. On advantage of this approach s that you can setup a standing order from this kind of account to drip feed the money back to you on a monthly basis. (Very few savings accounts allow standing orders to be set up).

DireEmblem

Virgin Money 2% account / Premium bonds.

The moment you mentioned easy access, they will probably give you the best safe returns.

MX5huggy

Don’t get in a spin about options, all savings rates are so low ATM. Save £200 a month at the end of the year you will have £2400 if you get 1% interest you will have and additional £13. 2% means £26. Not worth worrying about, it’s the saving that’s important. 

With that in mind Premium Bonds look like a fairly good option. Apart from they can only be held individually (either both have access to the account or split your investment between 2 accounts). You can put random amounts in (£25 plus) just using a debit card. You need to hold them for a whole calendar month before they go in the draw. You might not win anything so you get back what you put in, you’ve got a fair chance of winning £25 and a really small chance of winning more. You can take out lump sums whenever you want. 

The other option is review your current account see if there is a better option that may come with an attached savings account.

ktd22

Thank you all so much for your advice, very much appreciated