Joint Saving 2k per month. Where best to put it?

rvoice100

Hi all. We recently got married and are now ready to start saving for our next home (currently in a one bed flat that my now wife has a mortgage on). 

We have worked out that we can save £2k a month between us which will obviously build pretty quickly. As interest rates are high I believe there is much better places to grow this money instead of just putting it into the current account and adding to it each month. Any ideas? Im not all that knowledgeable with money tbh as I always had debt. Now im in the black and ready to save save save. We are talking about saving for 2 years before we start looking at our next property. 

Any advice is appreciated

eskbanker

rvoice100 said:

interest rates are high

Not really - they're no longer as pitifully low as they had been, but still well below where they've been historically.

If you haven't owned a property before then you can save in a Lifetime ISA for when you do buy, but beyond that the best bets for both of you will be the likes of regular savers and fixed term accounts:

https://www.moneysavingexpert.com/savings/which-saving-account/

Or make overpayments to the current mortgage, depending on its rate and terms....

george4064

How much are you both contributing to your pensions? You should at least contribute enough to maximise any matching offered by your employers.

Next, assuming you are both making decent pension contributions. When do you think you’ll need to access this money? If at least 5 years away minimum or preferably 10 years plus, consider investing in a S&S ISA which will almost certainly give a higher return than savings. The longer you leave it invested, statistically speaking the higher return it will generate (Read up on ‘compounding’ in Google)

eskbanker

george4064 said:

Next, assuming you are both making decent pension contributions. When do you think you’ll need to access this money? If at least 5 years away minimum or preferably 10 years plus, consider investing in a S&S ISA which will almost certainly give a higher return than savings. The longer you leave it invested, statistically speaking the higher return it will generate (Read up on ‘compounding’ in Google)

OP was pretty clear on this point:

rvoice100 said:

now ready to start saving for our next home

[...]

We are talking about saving for 2 years before we start looking at our next property. 

Bridlington1

One thing I would say regarding LISAs is that they only pay the 25% bonus on contributions and not interest. As LISAs pay less interest than the top easy access accounts, if you opt to go for LISAs you'd be best off opening one now with £1 and then depositing the remaining £3999 annual deposit just before the end of the tax year. This will maximise the total interest earned in the mean time. Assuming interest rates stay the same (which they won't), you'd have about £20 more interest doing it this way

Regular savers are probably your best bet at the moment. They often pay a higher interest rate than easy access accounts (some pay as much as 5%), see:

https://forums.moneysavingexpert.com/discussion/6106986/regular-savings-accounts-the-best-currently-available-list/p1

Many of the top paying regular savers require you to have a current account with that provider to open one, which will impact your credit report if you need to open several current accounts. Having said that hard searches are removed from your credit file after 6-12 months so if you aren't planning to buy for another 2 years you don't need to worry much about that.