Where to save 10k of cash for maximum intrest gain

Consecca

Hi All,

Very simply I will have saved another 10K by the end of October this year for a house deposit making my total saved deposit so far at 30k.

I already have 20k locked away in a LISA and have already used up my 4K allowance for this tax year and have received my 1K bonus.

Now I'm wondering where to lock away the remainder of my 10k for a year to gain the maximum interest on that?

Ideas I have in my head so far are to split it between a top-paying regular savings account and a one year fixed account but are the interest gains from this worth the squeeze?

Thoughts anyone?

xylophone

You might consider putting the £10,000 in Marcus https://www.marcus.co.uk/uk/en


and then transferring £1500 a month to

https://www.principality.co.uk/en/savings-accounts/everyday-savings-accounts/First-Home-Steps-Online


Savings rates here

https://www.thisismoney.co.uk/money/article-1583859/Best-savings-rates-General-savings-Internet-branch.html

jimjames

Virgin money pays 2% on £1000 in their current account, you can get around 1% with £5k each in BoS/Lloyds

Consecca

xylophone said:

You might consider putting the £10,000 in Marcus https://www.marcus.co.uk/uk/en


and then transferring £1500 a month to

https://www.principality.co.uk/en/savings-accounts/everyday-savings-accounts/First-Home-Steps-Online

Thanks, But would you say saving £1500 a month for 12 months is worth the reward of only £120 -150 interest returns at the end of that 12 months?

Daliah

Consecca said:

xylophone said:

You might consider putting the £10,000 in Marcus https://www.marcus.co.uk/uk/en


and then transferring £1500 a month to

https://www.principality.co.uk/en/savings-accounts/everyday-savings-accounts/First-Home-Steps-Online

Thanks, But would you say saving £1500 a month for 12 months is worth the reward of only £120 -150 interest returns at the end of that 12 months?

It's a bit tricky to calculate how much you would make from the regular saver but I reckon it would be no more than around £105. Plus no more than around £15 from the Marcus account. Max £120 total I would say.

If you put your money into a 1 year fixed term account via Raisin, you could get 1.23% plus £50 bonus (assuming you are new to Raisin), so £173 total.

Or you could get 1.35% or 1.33% without a bonus, some £135/133 total in 1 year fixes without a bonus.

All meagre returns but I would go for the Raisin account if I were you.

Thrugelmir

Consecca said:

xylophone said:

You might consider putting the £10,000 in Marcus https://www.marcus.co.uk/uk/en


and then transferring £1500 a month to

https://www.principality.co.uk/en/savings-accounts/everyday-savings-accounts/First-Home-Steps-Online

Thanks, But would you say saving £1500 a month for 12 months is worth the reward of only £120 -150 interest returns at the end of that 12 months?

How much are you expecting to return? 

Albermarle

Consecca said:

xylophone said:

You might consider putting the £10,000 in Marcus https://www.marcus.co.uk/uk/en


and then transferring £1500 a month to

https://www.principality.co.uk/en/savings-accounts/everyday-savings-accounts/First-Home-Steps-Online

Thanks, But would you say saving £1500 a month for 12 months is worth the reward of only £120 -150 interest returns at the end of that 12 months?

That is entirely a personal decision.

Linton

Consecca said:

xylophone said:

You might consider putting the £10,000 in Marcus https://www.marcus.co.uk/uk/en


and then transferring £1500 a month to

https://www.principality.co.uk/en/savings-accounts/everyday-savings-accounts/First-Home-Steps-Online

Thanks, But would you say saving £1500 a month for 12 months is worth the reward of only £120 -150 interest returns at the end of that 12 months?

If you want a substantially greater return you need to consider long term investing with some level of risk.  But that would not be suitable for a house deposit in the next few years.

refluxer

Consecca said:

xylophone said:

You might consider putting the £10,000 in Marcus https://www.marcus.co.uk/uk/en


and then transferring £1500 a month to

https://www.principality.co.uk/en/savings-accounts/everyday-savings-accounts/First-Home-Steps-Online

Thanks, But would you say saving £1500 a month for 12 months is worth the reward of only £120 -150 interest returns at the end of that 12 months?

As far as standard cash savings accounts are concerned, putting a lump sum into one of the higher-paying easy access accounts and drip-feeding into regular savers or taking out a fixed rate account with the full lump sum are likely to be the two best ways of saving at the moment.

One downside to the first approach when you have a large lump sum is that the monthly amounts you can pay into a regular saver are often fairly small (£250/month is typical and often as low as £50) meaning that you have to open a lot to take full advantage, so the advantage of that Principality regular saver (if you're a first-time buyer) is the relatively large amount you can contribute each month. Once you get to Tier 2 (£2501) after a couple of months, the rate becomes comparable to the best 'open to all' regular savers and actually exceeds them when you get to Tier 3 (£7501).

The tiered interest rate make calculations difficult but, according to the Principality, paying £1500 a month into that RS would get you £137 interest after 12 months. With a £10k lump sum you would run out of funds after 6-7 months though, so the interest you receive would obviously be less. You would need to add your Marcus interest to your calculations and if you thought you might be able to add to that lump sum during the first 6 months, then you could continue to contribute to the RS for as long as funds allowed. One potential benefit is that you'd have instant access to the Marcus money during that time and could make 3 withdrawals from the RS, including closure. Note the interest rates on both are variable so could change.

If the alternative was putting £10k into a 1 Year Fixed Rate account @ 1.33%, then that would get you around £133 interest and you'd have no access at all to the money during that time.

I would decide based on whether there's a chance you might need the money for a house deposit (or other reasons) within the next 12 months. If you thought you stood a chance of being able to save further and pay in £1500/month for 12 months though, then the Marcus/Principality option would be a good one and much more flexible than a fixed rate saver.

DireEmblem

If it were me, I would spread it around a couple of institutions.

Virgin Money is a shout.  Then since you're talking a year, why not think outside the box and look at the likes of InvestEngine or similar referral offers.  You could pick the 'lowest risk' managed investment policy, and receive £75 for depositing £100, and probably takes up 10-15 minutes of your time.  It won't earn you much more, and by choosing the minimum risk model, you would need to lose more than 40% of your balance to be worse off after year 1.  I'm not sure the other offers are worth it as a bit more risk with them as have a lower signup bonus.

There are MSE links of interest bearing accounts, check them out as well.

Tandem IIRC are 1.15% for a year, and ZOPA are 1.3% for a year as well.  In theory HL Active savings should be the highest if they work the product well which is currently 1.4% for 1 year.

Essentially I think:

1k in Virgin Money at 2% giving £20 return in a year
8.9k in HL Active savings at 1.4% giving £124.60
0.1k in lowest InvestEngine tier giving £75 assuming nil return from bond investments and £75 bonus.  Worst case -£100.

All in all £119.60 to 219.60 or 1.2%-2.2% in a year.