which is best for me?

hin501

Hi there, i have a problem...I am wanting to start a savings account, and put away about 40/50 pounds away a week, i am 19 and generaly want to tuck away a bit of money each week for a rainy day, or if that rainy day never comes (fingers crossed) just generally save up for the future, which bank/bank account is for me?please help!thanksNick

Robster88

Hello

I would suggest Sainsbury's Internet Saver (maybe a unconventional choice, not often talked about round these parts!) but I have a few reasons.

Firstly the rate of interest in quite competitive - currently 5.75% Gross which is quite a bit above the base rate (although it used to be 6.20% it has dropped recently but I think you'll find thats the case with most bank accounts)

As you want to save around about £40/50 then a regular saver might be a good idea - the Halifax regular saver is quite good - as long as you save £25 a month - they have a great rate of 7% AER but this come with a few conditions. Firstly, you aren't allowed to make any withdrawals without losing the high rate (not so good if that rainy day comes along and you need the money sharpish!) Secondly you need to make sure you can pay in at least £25 regularly which might be a problem if spare income is intermittent.

Sainsbury's bank however doesn't punish you for wanting to withdraw your money, and it doesn't matter how much you pay in or when you pay it - you can go for months and months without paying in a penny and you still keep the full interest rate.

Also remember that if your savings are under the annual allowance (around about £4900) you can fill in an R85 and send it to the bank that you choose and they will make sure that you get the gross interest rate (as you are 19 they would automatically deduct tax from you otherwise)

It is also easy to transfer money from the Sainsbury's Internet Saver to any current account (with any other bank, doesn't have to be with Sainsbury's which might be a condition of other banks) so that you can get your hands on your money when you want it - although it can take a day or two to get to the other account so remember to check the weather to see when it's going to rain!:D

These are just my thoughts, I'm sure other people on the forum will come up with some equally valid suggestions for you to mull over.

Hungerdunger

First question: Are you a tax payer? If so, I'd recommend looking at ISAs. There are several good offers at present from High Street banks and Building Societies. Even if the rate isn't quite as high as other savings accounts remember that ISAs are tax-free, while 20% tax is deducted from the interest of other accounts.

The maximum you can invest in an ISA in any one tax year is £3,600 so your £50 per week falls comfortably within that limit.

hin501

yep i pay tax, so an isa is my best option you think? which banks are best for this?thanks again

johng_uk

Barclays ISA. 6.5% AER - Withdrawls at anytime.

http://www.personal.barclays.co.uk/BRC1/jsp/brccontrol?site=pfs&task=homefreegroup&value=14230