02
Jul
2015
A question about : What is the best way to save in 10 months?? Help i'm confused!
Hi,
Can anybody help with this question. I currently have Ј3200 in a cash isa paying 1%. I want to save Ј16000 by the end of december between myself and my boyfriend and we are wondering what our best option would be. His bank account pays 6% on savings but the deposits are capped at Ј250 a month. Is it better to open a joint isa for both of us with a new provider and deposit the required amount to get to the Ј16000 less Ј250 (putting this in his 6% saver-not tax free) or keep saving separately and open a new one with better rates? Feeling confused by this!!
Best answers:
- An ISA is about the worst place you could put that money. Also the name has a clue "Individual Savings Account" so you cannot have a joint one.
You'll get 5% on your Ј9000 of your money with TSB and Nationwide current accounts, use the rest in 6% regular savers.
Or Can put the whole lot in Santander for 3% if you want less hassle - Rates on cash ISAs with easy access are very poor right now. As your savings timeframe is within ten months, the selection of high interest paying current accounts are probably the wisest option. You can save Ј2k at 5% in TSB, Ј2.5 at 5% in Nationwide and 3% on balances over Ј3k in Santander for example (though I should add, these rates are before tax - they still beat ISAs, however). Yes they do have some monthly funding requirements but it's really not a lot of effort to get a greater return than an ISA.
- Between two people, you can easily save Ј1,600 a month in sole 6% accounts:
- Ј250 HSBC
- Ј250 M&S
- Ј300 FD
but these accounts must be held for 12 months before you can withdraw your money.
Various current accounts will provide instant access but interest rates will be lower. Joint current accounts also create a financial association which might not be desirable.
Cash ISAs are a dreadful place to keep any money in that you plan to spend in the next year.
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