General savings accounts advice for a newbie

s79

I have approx 40-45k to save, unfortunatley I havent been very organised and just left it sitting in a rubbish barclays savings account for far far too long. So im trying to get myself sorted and get it put it in a savings account with a better rate of interest so I can maximise it for short-medium period of time

Now from reading the guides & the forums, the likes of Icici & Icesave seem to be the ones to go for, but im a total newbie with regards to this so would like some genral advice about how these accounts work and which are the best to go for.
For example how often is interest paid? Monthly or yearly? What happens to any interest earned if I wthdraw all or some of my money? I would like to avoid getting penealties if possible as I may be looking to buy a new house on the not too distant future. Oh and i want a an account which setting up and using is as painless & stress-free as possible! ;-)
For info I do have an ISA (with barclays) with about 19k in it, should I think about moving this to another isa too like the one offered by icesave?
Thanks

Lugh_Chronain

Did you sort your savings out s79?

Have a look here for info on the Icesave ISA

&

Here for info on ICICI’s HiSave Savings Account

Good luck

wafer_2

Hi s79

I am glad to hear that I am not the only lazy and disorganised person when it comes to savings. I have also been leaving my savings in rubbish accounts and if I had to go into the bank to pay a bill at the cashier desk etc, I dreaded the fact that they always tried to get me to make an appointment with an advisor to make better use of my savings. I always said I will pop in again in my own time to arrange it and I never did, however the other day I finally gave in and I am so happy I did it.

I am not sure about those two savings accounts you specifically mentioned, but in general, if you withdrawal money on a bond for example, the penalty depends on each company, some maybe 3 months of interest lossed on the amount withdrawn for example. Some may not even allow withdrawal. So you need to check the terms and conditions carefully.

If I have a chunk of savings, I always go for a fixed rate bond as I know what interest I am getting but that is my preference.

What ever product you decide on, just go and do it, if you don't do anything the only winner is the bank, because they have your money and are paying you peanuts.

E.G on 45K, with annual NET interest at 5.0% = £2,250 pa = £187.50 extra income per month for doing nothing :-).

Well good luck on getting organised s79

s79

Many thanks for your replies wafer & lugh.

Wafer thanks for the verbal kick up up the backside , your right, i just need to go ahead & get something (anything) sorted out cus im definately missing out with these barclays savings accounts, I regret not making the effort before TBH. I do tend to stick my head in the sand when it comes to all things financial, a combination of laziness and the percived compexity and uncertantity has held me back from sorting it out before.

However, i do have a couple of minor issues with regards to picking which savings account(s) i should go with. Im am erring towards Icesave firstly, followed by sainburies and then Icici. Icesave seems to offer one of the best rates with no penalties for withdrawals? Am i right in saying this?

I also want the account to have very simple & flexible methods of getting money in and out, which account would you say is the best in tha respect? I get the impression that they all differ in respect to how many is paid to & from the savings account, and also in respect to how many current accounts can be linked to the savings account (i will only need a link to one current account). I also read somewhere that icesave uses something called CHAPS and that there is admin fee for using it?
What is CHAPS & how does it differ from BACS?

Basically i just want someone to tell me which the best all-round savings account is in terms of ease of use, minimum penalties and best rates! :rotfl:

Thanks

Lugh_Chronain

CHAPS is an electronic bank-to-bank same-day value payment system.

The main benefit of CHAPS is that it is fast, secure and efficient and the money is transferred the same day. However banks charge for this and most people aviod it unless it’s absolutely necessary.

BACS are what all banks use to move your money to a nominated current account. This system usually takes a couple of days to move money from one account to another however it is free to use.

When you fill out the Icesave application form you’ll be given the option between BACS or CHAPS.

You are allowed only one nominated current account for each. This is usually the rule. I think this is to prevent fraud but not sure to be honest.

If you’re still unsure about Icesave have a look at their Key Facts especially where it says Are my deposits protected by the UK Financial Services Compensation Scheme?

Lugh_Chronain

You might like to look at MoneySuperMarket too.

wafer_2

Hi s79

Glad to hear that you are going to do something about it:j . When are you planning to buy a property? Some companies do a 3 month and 6 months bonds ( fixed term deposits ), if you don't want to do 1 yr. I would go for fixed rate right now rather than variable but that is based on my expectation that interest rates may fall this year, however who knows what will happen.

Also, I am a little old fashioned as well in the fact that I like to be able to go to my branch to open, close accounts just for the convenience to get my money there if I need it, rather than internet/ phone based accounts etc, but that is my preference. So in that respect, I don't mind taking an account that is slightly lower in interest.

I just did a 3 month bond at my bank (6.25% AER, 6.11% gross, 4.89% net) , not sure if that was good or not but it was better than being stuck in an existing account paying 2.94% net.

I think there have some posts on these ICICI and ICESAVE accounts on this forum so you should check them out because I read some posts that some people had some difficulty with the accounts etc..

Lugh_Chronain

ALLIANCE & LEICESTER and NORTHERN ROCK have very good bond/term accounts but these have a 1yr term notice. A&L has 7% AER & NR has 6.71% and both are branch based.

I've never had problems regarding telephone or internet banking except for inconvenience of course but it depends how you define inconvenience. One of the things with branch based accounts is there are few and far between that do good interest rates however there are some good ones as I have pointed out. And the other is problems occur with most if not all banks; I've had problems with Barclay's and Abbey.

If you feel safer and/or for whatever reason go for the branch based ones and as wafer has pointed out anything is better than having an account that gives next to nothing.