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Advice on how to get the best returns from regular saving pot

Hi, my husband and I are trying to save >£20,000 over the next 12 months. We currently have a 'pot' of £8000 which is sitting in an easy access monzo account with an interest rate of 3%. We are saving regularly £800 per month. There will be additional contributions throughout the year when we are able to do extra locum shifts. 

What would people's recommendations be on where to put the money for best interest return?

We need to be able to pay into the account every month.
We will not need to withdraw from it until September 2026. 

I have looked at setting up regular savings account, for example the 12 month first direct 7% - however its a maximum of £300 per month with annual interest at £135. Or another option is to open a regular savings account - the best available currently is the CHASE 4.75%. We already both have Cash ISAs (Trading 4.38%).

What option would be better for interest return?
1. Open several different regular savings account eg first direct 7%
2. Open regular savings account - chase 4.75% 
3. Or alternative options that I haven't suggested ?!
  

Comments

  • InvesterJones
    InvesterJones Posts: 1,257 Forumite
    1,000 Posts Third Anniversary Name Dropper
    Put the capital in as high an interest rate account as you can, which could be a notice or fixed rate account. Get more than one regular saver to maximise the return on new savings.
  • I don't think it's possible for you to save £20K in the next 12 months.
    £800 x 12 = £9600
    £8000 @ say 4.4% = £352
    That around £10K
    Irrespective of what you do with it you won't double your money in 12 months.
  • friolento
    friolento Posts: 2,534 Forumite
    1,000 Posts Second Anniversary Name Dropper Photogenic
    The best returns will be from several Regular Saver accounts. There’s a long thread dedicated to this type of accounts.

    Next best would be one of the best easy access accounts. Less admin, less return. Check on moneyfactscompare for the best rates.

    Keep an eye on potential offers over the next week or two. These will be mentioned in the dedicated threads on here
  • El_Torro
    El_Torro Posts: 1,931 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Will you be paying tax on some or all of the interest? If so it's worth looking at Cash ISAs. Premium Bonds are also good for 40% or more tax payers. However you won't win a fixed amount. Your winnings could be surprisingly high, or £0. 

    The best result will probably involve putting £8k into as high interest easy access account you can find, also feeding as many good interest regular savers as you can. 
  • Ch1ll1Phlakes
    Ch1ll1Phlakes Posts: 211 Forumite
    100 Posts Name Dropper
    edited 1 September at 1:59PM
    RosieAnn said:
    Hi, my husband and I are trying to save >£20,000 over the next 12 months. We currently have a 'pot' of £8000 which is sitting in an easy access monzo account with an interest rate of 3%. We are saving regularly £800 per month. There will be additional contributions throughout the year when we are able to do extra locum shifts. 

    What would people's recommendations be on where to put the money for best interest return?

    We need to be able to pay into the account every month.
    We will not need to withdraw from it until September 2026. 

    I have looked at setting up regular savings account, for example the 12 month first direct 7% - however its a maximum of £300 per month with annual interest at £135. Or another option is to open a regular savings account - the best available currently is the CHASE 4.75%. We already both have Cash ISAs (Trading 4.38%).

    What option would be better for interest return?
    1. Open several different regular savings account eg first direct 7%
    2. Open regular savings account - chase 4.75% 
    3. Or alternative options that I haven't suggested ?!
      
    I would suggest to open a few regular savers each. May be more effort and slightly harder to track if you're not used to it but would allow your funds as you save them to achieve higher interest rates. There are many regular savers paying over 6% in interest so with a combination of a few of these you maybe could achieve on average 6.5-7% by opening the best accounts.

    I would also suggest you keep an easy access savings account along side these just in case something do go wrong and you need some access to you savings. Having the chase savings account would be a suitable option. Or as you may end up generating a lot of interest (and depending on your tax situation) a flexible cash ISA may be of use.

    As suggested above the £20k figure is a little out of reach with your current amount of saving, though I do note the additional contributions you mention. To achieve £20k in the next year as a household you would need to be saving £1000 per month on average i.e £12k in a year to get to the £20k value (8k+12k). That means for every month saving £800 you need one month saving £1200. Just mentioning this so you can see what you will need to do in order to achieve you goal and I hope you do so. 
  • Bobblehat
    Bobblehat Posts: 822 Forumite
    Seventh Anniversary 500 Posts I've been Money Tipped! Name Dropper
    RosieAnn said:
    Hi, my husband and I are trying to save >£20,000 over the next 12 months. We currently have a 'pot' of £8000 which is sitting in an easy access monzo account with an interest rate of 3%. We are saving regularly £800 per month. There will be additional contributions throughout the year when we are able to do extra locum shifts. 

    What would people's recommendations be on where to put the money for best interest return?

    We need to be able to pay into the account every month.
    We will not need to withdraw from it until September 2026. 

    I have looked at setting up regular savings account, for example the 12 month first direct 7% - however its a maximum of £300 per month with annual interest at £135. Or another option is to open a regular savings account - the best available currently is the CHASE 4.75%. We already both have Cash ISAs (Trading 4.38%).

    What option would be better for interest return?
    1. Open several different regular savings account eg first direct 7%
    2. Open regular savings account - chase 4.75% 
    3. Or alternative options that I haven't suggested ?!
      
    Ch1ll1Phlakes's post is full of good advice, but I wondered what it would take to get close to that £20K figure.

    I like playing with spreadsheets  ... so here's just one example using 3 "popular" RS's, 2 fixed and 1 variable.

    Person 1 and 2 are totally interchangeable and in practice are only there as the persons opening the RS's, not necessarily providing the funds. No tax liability is taken into account! Interest figures come from MSE RS calculator.

    Part 1 - £800pm dripped in directly into Person 1's 3 RS's, and £8000 moved to Chase Boosted Saver to drip feed £666.67 monthly into Person 2's RS's ...



    Part 2 ... getting closer to £20K



    You can have a spreadsheet play yourselves with other RS's instead of the ones I picked, if you like! I notice you mentioned Cash ISA's so I'm presuming that there will be some interest from there, which may help to lower (or eliminate?) the need to "up" the deposits as per Part 2.

    If I made any mistakes, I'm happy to change and repost ... forumites will be sure to let me know!

    Happy saving!
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