Best way to save small amounts...

annaangeluk_2

Feel a bit daft posting this after reading some posts like 250k+ to invest etc!

I'm completely clueless about savings accounts etc (my dad was a financial advisor so you'd think some of his knowledge would have rubbed off on me!) I recently bought a new house and although have increased my mortgage I have also cleared all my silly small bits of debt.

I've now worked out that I can afford (to begin with) £10 pm to save, with a view to increasing it gradually as time goes on. I'm guessing I'll probably need something with fairly instant access just in cae of emergencies etc.

I'm hoping because it's such a small amount no one suggests a piggy bank!:o

Thanks in advance

Anna x

frivolous_fay

Have a look here OP

http://www.moneysavingexpert.com/savings/savings-accounts-best-interest

Ideally, an ISA is the first place I'd put money, but if you might need access to it, look instead for an account that allows you to do this without penalty.

chesky369

I would put it into a savings account that you feel comfortable with, rather than an ISA at first. When you've got a little bunch of money that you know you don't need to touch, then you can put it into an ISA. I personally would recommend ICEsave - nice and easy once you've got the hang of it.

CLAPTON

if you are a tax payer then an ISA will pay interest without deduction of tax. many allow small payments and instant access if you need it.

Mikeyorks

If you've just made the big jump from 'debt' to 'savings' .... I'd just now make a small jump to an easy access account (as that fits your 'emergencies' etc requirement) .... until you know you can make the savings stick.

If you've got a current account .. see if your existing provider has a suitable savings account you can run alongside? That way you should be able to move money (I'm assuming you can do it online) between the accounts virtually instantly. Looking for the best interest, at this time, isn't essential as the amount you're talking about won't generate that much, as you realise.

For example - if you do manage £120 untouched after a year - that will generate £7.20 (gross) at 6% .. or £6 at 5% - so it's your capital that's more important at this stage .. so, best to make it convenient rather than higher interest and inconvenient? File an R85 when you open the account (gets the interest gross) - if your total income next year is £5345 or less. But even if you have to pay tax on the interest - we're only talking £1.44 or £1.20 on my two examples ... not enough to lose sleep over.

Then - if you find you can save more? Separate out what you can leave untouched - and then get an ISA for that money, leaving your emergency fund in the saving account.

Bit of reading in the link at post #2. But .. initially ... I'd just get an account in partnership with your current account.

annaangeluk_2

Mikeyorks wrote: »

If you've just made the big jump from 'debt' to 'savings' .... I'd just now make a small jump to an easy access account (as that fits your 'emergencies' etc requirement) .... until you know you can make the savings stick.

If you've got a current account .. see if your existing provider has a suitable savings account you can run alongside? That way you should be able to move money (I'm assuming you can do it online) between the accounts virtually instantly. Looking for the best interest, at this time, isn't essential as the amount you're talking about won't generate that much, as you realise.

For example - if you do manage £120 untouched after a year - that will generate £7.20 (gross) at 6% .. or £6 at 5% - so it's your capital that's more important at this stage .. so, best to make it convenient rather than higher interest and inconvenient? File an R85 when you open the account (gets the interest gross) - if your total income next year is £5345 or less. But even if you have to pay tax on the interest - we're only talking £1.44 or £1.20 on my two examples ... not enough to lose sleep over.

Then - if you find you can save more? Separate out what you can leave untouched - and then get an ISA for that money, leaving your emergency fund in the saving account.

Bit of reading in the link at post #2. But .. initially ... I'd just get an account in partnership with your current account.

Thanks again for your help! This is the 2nd time you've explained stuff to me!! I'm honestly not a daft as I sound! Because my dad was qualified at all this he just used to sort it out for me, now i wish I'd asked him to show me instead of just doing it!!

I'm slowly learning thanks to people like you and all the other helpful mse people!

Thanks again

Anna x

Mikeyorks

annaangeluk wrote: »

This is the 2nd time you've explained stuff to me!!

I know. But if I thought it was daft I would have said 'that's a bit daft'!:p And I didn't ...... 'cos it wasn't.

Did you sort out the missing money?

annaangeluk_2

Mikeyorks wrote: »

I know. But if I thought it was daft I would have said 'that's a bit daft'!:p And I didn't ...... 'cos it wasn't.

Did you sort out the missing money?

Thanks! Makes me feel a bit better! I'm definitely going to make sure my 6yr old dd is better with money than I am! She;s already got a bank account and will not ever lend me money! She's a very smart girl!

The money is in the process of being sorted! They have accepted that it wasn't my mistake but I'm still waiting on the forms. I think some of my post has gone astray from the old house cos now they won't let me set up direct debits!! They've said they'll waive any charges until it's sorted so that's something!! It's because of that I want some emergency savings! There;s only so many coins that fall down the back of the sofa!!:rotfl:

Mikeyorks

annaangeluk wrote: »

She;s already got a bank account

Hope there's an R85 filed on it .. to get gross interest .... as that's rarely automatic even for specific children's accounts?:p

The money is in the process of being sorted!

Excellent. All a bit slow, isn't it .... but at least it's headed the right way.