Advice please!

cadboll

Hi!

Here's probably a simple question for all you money-saving experts! I'm a first time buyer and as you might have guessed struggling to get on the housing market - things in Northern Ireland are just as bad as in the rest of the UK! In the meantime I am building up a house deposit. I have been using the online saver accounts with Nationwide and A&L but was wondering if perhaps anyone had suggestions as to a better place to put the money? Is there somewhere with better interest? As I don't know when I will be purchasing, I am reluctant to tie the money in an long-term account.

Nationwide 5.00% Gross
A&L - 4.50% Gross

Many thanks.

P.S. I'm new to this so do forgive my ignorance in these matters!

mdb99jh

I am looking for the same thing (see previouse thread!). First Direct do an e-savings account at 5.20%, not sure if there is anything better. See what the experts have to say...

Little_Miss_Winner

Hi Cadboll,

Justout of interest whereabouts in NI are you?

I am in Manchester and OH had had job offers in NI, don't know what to do. We do have lots of family in Ireland, but also with the implications of 3 children under 5, don't know what to do.

Must say though, you do get a lot of house for your money in Ireland, compared to Manchester. :j

cadboll

Hi pot'o'gold

Renting in Belfast at the moment. House prices here are high but probably low in comparison to the rest of the UK. The average house price is now over £100k but perhaps that is just the starting point for ones in England etc!

System

How about opening a regular savings account at the Derbyshire Building Society? Also how about setting up a Halifax regular saver? Obviously if your a tax payer you need to make sure you have the maximum amount allowed in an ISA. Make sure your current account pays a decent amount of interest. A few months ago i swapped my account from one that paid 0.10% interest to one that paid more.

I use this site a lot for comparisons between savings and current accounts.

Happy searching.

cadboll

Judi

Thanks for that advice.

My "dilemma" (if you can call it that!!) is that although I now have sufficient money for a deposit, what is actually holding the whole process up is a pay review from work. Waiting on it for 5 months now - its been promised, but red-tape is holding it up. So in the meantime I'm wanting to keep the deposit money in an account with good interest. I've been using the online saver accounts but wondering if there was a better option for me? I use the Halifax Regular Saver at the moment for other savings.

If I was to transfer some of the money into an ISA account would this be of benefit to me? If, for example, I was to remove the money by December - would it have been better to keep it in an online saver instead of an ISA?

Sorry for all the questions - shows my complete lack of knowledge on the subject!

Thanks again!

P.S. Using A&L Premier Plus Current Account at the moment - from memory interest is near 5%!
P.S.S. And of course the follow-up question - if ISA is the way to go, any advice as to the best one?

grumbler

cadboll wrote:

... if ISA is the way to go, any advice as to the best one?

'Best instant access ISAs?' thread...

Kazza242

Hi Cadboll.

If you are planning on saving for a while longer (i.e. another year), then a mini cash isa is probably the first account you should start with. The best mini cash isa's at the moment are:

Yorkshire BS E-ISA pays 5.20% and is run over the Internet. Minimum balance £10.

Teachers BS' mini cash isa pays 5.15% and is run via the post. Minimum balance £1,000.

Halifax ISA Saver Direct pays 5.15% and is run via the phone or Internet. Minimum balance £1.

Kent Reliance mini cash isa pays 5.11% and is run via the branch or post. Minimum balance £1.

National Counties BS' cash mini isa (issue 2) pays 5.10% and is run via the branch, post or phone. Minimum balance £1.

First Direct have a mini cash isa that currently pays 6.25%, but this rate is set to fall to just 4.35% from 6th October 2005.

After a mini cash isa, you could look at opening a regular savings account.

Halifax pays 7% (fixed rate) to their regular saver account holders. You must deposit between £25-£250 per month. Funds are swept into another account after 1 year term.

Dudley BS pays a fixed rate of 7%. 1 year term. Deposit between £50-£300 per month.

Principality BS pays 6.75%. Deposit between £20-£500 per month.

Scarborough BS pays 6.00%. No term - max investment £15,000. Deposit between £10-£250 per month.

Derbyshire BS pays 5.85%. No term. Deposit between £10-£1,000 per month. **Special offer allows you to open two accounts - expires 31 July 2005.

You could feed your regular saver from an easy access account to maximise your interest. Offerings: ICICI 5.40%, B&B 5.10%, Cahoot 5.10%, Yorkshire BS 5.00% and Nationwide 5.00%.

cadboll

Thanks for all the info. Very useful indeed!

One final question! If I'm looking at only 6-8 months before needing access to the cash, is an ISA still the best way to go?

Probably easier to explain with an example....

If I put £x into an ISA account but then withdraw it in 6 months, do I lose any benefit gained with it? In order to maximise interest would it be more beneficial to keep the money in an online saver account?

To summarise, which is of more benefit to me (keeping in mind that I may need access to the money in 6-8 months time) and will maximise the interest?
(i) ISA (ii) Online saver (iii) Regular Saver

Once again, many thanks

Kazza242

cadboll wrote:

Thanks for all the info. Very useful indeed!

One final question! If I'm looking at only 6-8 months before needing access to the cash, is an ISA still the best way to go?

To summarise, which is of more benefit to me (keeping in mind that I may need access to the money in 6-8 months time) and will maximise the interest?
(i) ISA (ii) Online saver (iii) Regular Saver

The answer to your question really depends upon your tax status. A non-tax payer would probably be better off with a regular saver, as they do tend to pay higher rates of interest than ISA's or online savers. If you're a basic rate or higher rate tax payer, then a mini cash isa is the best option of the three. With a mini cash isa you get to keep all of the interest accrued without having to hand over any to the taxman.

Having said that, remember once you use your mini cash ISA allowance for the year (£3,000), if you make a withdrawal you cannot put that money back into your isa. For example, if you deposited the full £3,000 allowed for this tax year (April 6 2005 - April 5 2006) and you made a withdrawal of £2,000, you can not put that £2,000 back in for this tax year.

I think a mini cash isa is the best option to choose, afterall, when planning on buying a house, it can take a long time for it all to go through, so why not earn tax-free interest in the meantime. After you've used your isa allowance for the year, you could look into a regular saver that allows you to deposit larger sums each month and allows you to make a penalty-free withdrawal. The Derbyshire BS account (5.85%) allows this (up to £1,000 per month) and if you open two regular saver accounts with them (allowing deposits of £2,000 per month), you can make one withdrawal from each account without penalty. Always make sure that you have some cash in an easy access account, that allows unlimited withdrawals, just in case of emergencies.

steady__eddie

Cadboll, please see my reply to your post "Best instant access I.S.A.s"
If my limited technology kmowledge can do it, this is the link,
http://www.britannia.co.uk/c_savings/product/regsav/homesav/prod.html