Investment/savings advice please!

[Boycey0211]

Never thought I'd have to create a thread on this but theres so many options out there and you guys have a wealth of knowledge so fingers crossed I can sort it out!

Right, currently I have 35k sat in an instant access ISA, no need to take any out to support myself or anything, and the interest rate has dropped so low I'm only making £16 a month interest which isn't good enough. This is with Natwest by the way, I would prefer to stay with them if possible.

I am looking to use it as a house deposit at some point so don't want it locked away for 5-10 years, but I dont require the 'instantness' of the ISA as much, I could easily use some sort of month notice to withdraw system.

Now this is my lifetime savings, so I don't want to put it into any sort of high risk savings scheme as I can't rebuild it if I lose it, at least not without it setting me back significantly.

At the moment I put in around £350 a month via standing order without fail, plus the occasional lump sum if I have any excess laying around in my current account on a quiet month where I've been good.

Basically I would like to know whats the best savings scheme out there to get a better return on my money, I dont mind splitting the lump sum if needed. I've had a look at all the schemes out there and its just boggling me so thought you guys n gals might be able to give me some advice.

Cheers in advance!

 

[Peerzy]

1) Open a Santander 123 current accounts, put £20k into it.

2) Open a Tesco internet savings account and use this account to create 2x £1 direct debits on the Santander 123 current account.

3) Set up a standing order on pay day to send £500 from our normal current account to the new Santander 123 CA, have a standing order set for the next day to return £150 of it (so that you save your £350 pcm and complete the £500 monthly credit to the account that is required).

The above will generate 3% interest (minus a monthly fee of £5), so roughly £40 after basic tax.

For the remaining £15k either do the above again with a second Santander 123 CA or spread it across a number of the other high interest paying decent current accounts;

Nationwide do 5% up to £2.5k
Lloyds do 4% up to £5k
TSB do 5% up to £2k
Tesco do 3% up to £3k

You can open multiples of each of the above without much issue.

All of the above would be medium returns for no risk. It's easy enough to average 4% or so for £35k by using the above accounts and a few monthly savers (LLoyds, First Direct and HSBC all offer 5%-6% on monthly savers).

You can earn more by investing money into stocks and shares, property etc.... but these all come with risks.

 

[HazardO]

Given the stock market has tanked recently, I'd be looking to get that money into a share ISA. In 5-10 years time it would be very surprising if you hadn't made some above inflation gains, and you can take advantage of the tax advantage of the ISA.

If you want low risk however buy government bonds.

 

[Freakbro]

1) Open a Santander 123 current accounts, put £20k into it.

Nationwide do 5% up to £2.5k
Lloyds do 4% up to £5k
TSB do 5% up to £2k
Tesco do 3% up to £3k

This really.

Though the Nationwide Flex Direct only has that interest rate for the first year.

Also throw in there Halifax @ £5 / month flat rate payment.

They will all have different requirements on what needs to trigger the interest (Amount paid in, x no of direct debits) but cycle the same money through all of them and it's easy.

Santander/Lloyds/Halifax all need 2 direct debits and x amount paid in

Nationwide/TSB only require x amount paid in

Tesco has no restrictions as far as I can see (I might open one of these today to add to my list!)

 

[Boycey0211]

Cheers so far, looking around that does seem like the best option, my only worry Is that I'll forget where all my money is sat and end up neglecting one of those payments so the account is effectively redundant.

I've looked at the stocks and shares ISA, but the returns are still low compared to my cash ISA a few years ago.

From those that have done the split accounts thing, how much did you put in and what returns are you looking at now?

e: Just seen the DD clause on the Santander 123 account, I've only got one direct debit going out and it requires two

 

[Peerzy]

Cheers so far, looking around that does seem like the best option, my only worry Is that I'll forget where all my money is sat and end up neglecting one of those payments so the account is effectively redundant.

I've looked at the stocks and shares ISA, but the returns are still low compared to my cash ISA a few years ago.

From those that have done the split accounts thing, how much did you put in and what returns are you looking at now?

You can automate everything. Tesco savings account is a direct debit creator and just cycle £1000 around all your accounts once a month via a bunch of standing orders.

Keep a basic spreadsheet to tally up totals and see how much interest your're earning.

On £35,000 split across multiple current accounts I'd expect you to be earning roughly £90 after basic tax.

When you reach your limit for each account you just open another one.

 

[Peerzy]

e: Just seen the DD clause on the Santander 123 account, I've only got one direct debit going out and it requires two

See point 2 of my first post. The Tesco online savings account allows you to create direct debits. The savings account will pull £1 via direct debit from a current account into the savings account every month and this will mean you meet the requirements.

No need to have any actual direct debits.

 

[Boycey0211]

You can automate everything. Tesco savings account is a direct debit creator and just cycle £1000 around all your accounts once a month via a bunch of standing orders.

Keep a basic spreadsheet to tally up totals and see how much interest your're earning.

On £35,000 split across multiple current accounts I'd expect you to be earning roughly £90 after basic tax.

When you reach your limit for each account you just open another one.

Thanks for that, makes more sense now.

Has anyone got a decent amount of premium bonds? I'm aware of the chance factor but have little to lose on my current savings by switching.

 

[Freakbro]

That's a nice solution Peerzy as I have split my actual D/Ds across all the accounts and had finally ran out of them myself!

 

[Peerzy]

Thanks for that, makes more sense now.

Has anyone got a decent amount of premium bonds? I'm aware of the chance factor but have little to lose on my current savings by switching.

Premium bonds are rubbish, the returns are nowhere near as good as other methods. I believe Fox has done a few detailed replies in the past about them and run numbers proving why they should be avoided.

That's a nice solution Peerzy as I have split my actual D/Ds across all the accounts and had finally ran out of them myself!

I have 2 Tesco savings accounts that are used only to pull £1 direct debits from about 10 current accounts.

All my real direct debits come out of my actual current account that I use on a day to day basis.

 

[nine_tails]

1) Open a Santander 123 current accounts, put £20k into it.

2) Open a Tesco internet savings account and use this account to create 2x £1 direct debits on the Santander 123 current account.

3) Set up a standing order on pay day to send £500 from our normal current account to the new Santander 123 CA, have a standing order set for the next day to return £150 of it (so that you save your £350 pcm and complete the £500 monthly credit to the account that is required).

The above will generate 3% interest (minus a monthly fee of £5), so roughly £40 after basic tax.

For the remaining £15k either do the above again with a second Santander 123 CA or spread it across a number of the other high interest paying decent current accounts;

Nationwide do 5% up to £2.5k
Lloyds do 4% up to £5k
TSB do 5% up to £2k
Tesco do 3% up to £3k

You can open multiples of each of the above without much issue.

All of the above would be medium returns for no risk. It's easy enough to average 4% or so for £35k by using the above accounts and a few monthly savers (LLoyds, First Direct and HSBC all offer 5%-6% on monthly savers).

You can earn more by investing money into stocks and shares, property etc.... but these all come with risks.

Thanks for the info. I am in a similar situation

Never been terrible with money , but i have never made an effort to grow it.
Truth is its just been 4 years since when i have had my savings grow , should have started sooner.

 

[Boycey0211]

Thanks for the info. I am in a similar situation

Never been terrible with money , but i have never made an effort to grow it.
Truth is its just been 4 years since when i have had my savings grow , should have started sooner.

I'm the same, I've kept saying to myself 'don't lock it away, you might buy a house next year'

Could have had it in a 5 year fixed rate since then

 

[Peerzy]

I'm the same, I've kept saying to myself 'don't lock it away, you might buy a house next year'

Could have had it in a 5 year fixed rate since then

Current accounts and monthly savers pay more than nearly all fixed rate accounts. There is no need to lock away money at the moment with the banks.

 

[RichIbizaSport]

I'd wait until April and open a p2p ISA with ratesetter. Set it up to reinvest monthly at 3.5% ish.

Maybe don't put all your eggs in one basket, in which case I'd put up to £20k in a 123 current account. As for DD, you can setup paypal as one if you haven't already, just buy some 99p tat on ebay and pay via DD.

 

[Vanilla]

Given the stock market has tanked recently, I'd be looking to get that money into a share ISA. In 5-10 years time it would be very surprising if you hadn't made some above inflation gains, and you can take advantage of the tax advantage of the ISA.

If you want low risk however buy government bonds.

This. You make make money on shares and also the dividends (many companies paying out 5+% a year)

However it depends on your risk adverseness. They do down as well as up.

 

[Maccapacca]

Is there any reason you can't drop it all on a house now? With the current level of inflation you'll be struggling just to maintain an even keel

 

[Boycey0211]

Is there any reason you can't drop it all on a house now? With the current level of inflation you'll be struggling just to maintain an even keel

Well in theory no, although I haven't found anywhere I really want to live yet.

I also work away for 6 months of the year, and am due to go away again shortly so its a pain trying to sort stuff like this out while im out of contact.

Cheers anyway to everyone for the advice, its already ruled out a few things i was wondering about.

 

[teaboy5]

Here

http://donate.unhcr.org/international/syria

 

[Maccapacca]

Well in theory no, although I haven't found anywhere I really want to live yet.

I also work away for 6 months of the year, and am due to go away again shortly so its a pain trying to sort stuff like this out while im out of contact.

Cheers anyway to everyone for the advice, its already ruled out a few things i was wondering about.

Would you consider then buying off plan on a development that suits your times and movements? Probably more beneficial just fixing the cost of property now or soon.

 

[Boycey0211]

Would you consider then buying off plan on a development that suits your times and movements? Probably more beneficial just fixing the cost of property now or soon.

Well since your previous post I've had a look at some houses online. I'm not sold on new builds particularly, found a nice listed place with garage for 170k that potentially I could go and have a look at.

I know what you mean though, chances are its only going to go up, and then I could look at using one of these other ideas for future savings instead.