Long term high interest savings, low monthly deposit

rjgb

Hi everyone,

I can't find a discussion on MSE relating to this topic. If anyone knows of one, please let me know! Otherwise, any suggestions?

I'd like to save a small amount per month (say £30-£50) in (obviously) as high an interest savings account, or equivalent, as possible. I don't mind tying my money up for 5 or 10 years, particularly if it means I can have a higher interest rate. Can anyone suggest the best options?

Thanks,

Richard

grumbler

The best option is to use 7% Halifax Regular Saver or 8% HSBC Regular Saver (for later one you must pay your salary to current account with HSBC). After 12 months move saved amount to tax-efficient cash ISA and start the 'cycle' again.

P.S. If you have a child you can do the same, but with Halifax 10% Regular Savings Account

rjgb

How strange. That's exactly what I've done so far (using the Halifax option). Are there any benefits to be gained though (financially) it allowing my cash to be tied up for 5 years somewhere? Or does Halifax/HSBC beat it?

Cheers.

Richard

grumbler

rjgb wrote:

How strange. That's exactly what I've done so far (using the Halifax option). Are there any benefits to be gained though (financially) it allowing my cash to be tied up for 5 years somewhere? Or does Halifax/HSBC beat it?

I think this is the best strategy fo no-risk savings. You can potentially earn higher interest with more risky investments.

P.S. Example: 'Guaranteed Growth Plan -too good? ' with further links inside.

Midas

As grumbler says, this is the best strategy. Don't forget that after the first year you can drip feed the lump sum you have built up back into a higher interest regular saver by increasing your monthly payment.

e.g. Year 1 Save £50 for 12 months = £600 (plus interest earned)

Stick the £600 in an ISA/high interest account (such as ING)

Year 2 Save £100 per month into monthly savings account (original £50 plus £50 from last years pot...)

Bit of hassle moving the money round, but worth it for the extra interest.

rjgb

Ok, that's all good news for me then!

What if I was happy to take on some risk? Even high risk, and again tie my money for 5 years/

Richard