Savings


(Dan) #1

Hey!

I’m not 100% sure I have put this in the correct category… if I haven’t please move it…

Ok… so this is a question about savings… I have X amount of savings currently sat in a 0.05% Cash ISA with Lloyds… this is not great I am aware of this… however this year I wanted to be good with my money and make it work for me while I’m sat eating cake… :cake: anyway…

My question is… where should I put my money to make the most of it? ISA, Savings Account… where?

I know there are lots of people here who know a lot more than me about financial products so until Monzo can help me I thought I would ask you amazing people :slight_smile:

So fire away! Give me some good products/ services/ideas…
My only thing is it must not be locked away… I need easy access to the cash should I need it…

Boom
Dan


ISA, Investments and Pots
#2

I’ll give you a website for some reading up to make an informed decision :slight_smile:


(Dan) #3

Thanks!

I know of, and have used this website loads of times before but I feel it has now got too much information, is crowded and takes so long to find what you’re looking for by the time you do you’ve forgotten the first option or even why you’re there! :see_no_evil:

It’s like a minefield and whatever way you turn there’s an army of information to confront…

I just thought to ask on here so people can comment on how they save… Actual people who use / have used the products and can give information

Dan


( related to Monzo CEO, Investor in Monzo ) #4

1st - change your cash ISA provider - 0.05% is rubbish - a quick look there are lots giving around 2% you’re still losing money but at least its more than Lloyds are offering -

It all very much depends on personal appetite to risk really , cash ISA with a bank building society, probably safe as houses up to 85K - you should be maximising the interest rate possibly with other providers as some are only good rates for 1 year - a simple matter to change provider

A stocks and shares ISA will potentially give you a much better tax free “profit” - or you could lose the lot in a stocks and shares ISA.

You should always try to use your max ISA allowance every year if you can, as interest rates will only be going up :slight_smile: and if you miss a years ISA savings you cannot put it in in later years

Starting a pension, although not a liquid asset, the earlier the better

Stocks and shares ISA - funds can usually be cashed in in 24 hours
buying into a Japanese fund this year would have given you a 46% return
or tracking the FTSE would have given you 7%
however it could have equally gone down the same amount or more :slight_smile:


(Change Works) #5

If you are willing to put your savings away for a year or more, you’ll get better rates. I’m no expert, but I don’t think plain vanilla ISAs are a great idea at the moment. The more specialist ones (LISAs) may be good for you depending on your circumstances.

NS&I have savings products which pay 2.2% and Atom Bank do good deals as well.

Don’t forget bank current accounts, either. Even a Starling account will beat you current ISA. TSB, Santander and Nationwide are others you might want to look at.


#6

Also note, that you don’t have to put your cash into ISAs (or even savings accounts) at all. There is now a tax free allowance for interest income up to £1k for basic rate earners. (less for higher rates).

Many banks offer better rates for plain current accounts, although often only up to relatively small balances. (I think the highest rate I saw was 5% on nationwide current accounts [for 1 year and up to 2.5k])

Depending on how much cash you have, you can also combine multiple of these accounts. When we were saving for our house deposit we had our savings spread over 6 accounts (2 of them Help To Buy ISAs, the rest current accounts), in the end, to get the most interest out them. Our total interest rate last year was about 3.5%.

The current accounts all only paid interest up to fairly low balances, and had minimum income, as well a requirement for a number of DD going out each month. Others paid cashback on direct debits. I ended up setting up circular standing orders to transfer cash from the main account in circles to each current account and then into the ISAs.

Also keep in mind that top interest accounts are often changing. If you want to maximise returns I’d suggest researching top accounts about once a year and switching were appropriate.


(Andre Borie) #7

Can you afford to loose that money? If so put in a high-risk investment like cryptocurrencies or shares, you’ll (hopefully) get more returns. :wink:


#8

Is crypto really any different from the stock market?


#9

Cryptocurrency is what I’d consider very high risk. Most people would not take that risk on the stock market, I’d assume.

Also, if you invest into stocks, you are actually buying something. If you Invest in cryptocurrency you pretty much get nothing.


(Andre Borie) #10

Also, if you invest into stocks, you are actually buying something. If you Invest in cryptocurrency you pretty much get nothing.

I’m not so sure about that one. Not to defend cryptocurrencies, but if a company goes bankrupt you pretty much have nothing. Same with a cryptocurrency, but an established cryptocurrency is way harder to “bankrupt” than a company.

As an example, if tomorrow Uber is outlawed in all US states it will pretty much be the end of it and your shares will be worth less than the eventual paper or storage drive space they’re being kept on. Bitcoin? I’m not so sure, as it’s explicitly designed to resist against this kind of censorship. In fact, it’s already outlawed in a bunch of countries and yet its value has done nothing but gone up in the last few years. :wink:


(Brandon Billingham) #11

Currently the best savings account around if you have more than £2000 to save or you don’t want to split savings across accounts.

http://www.theaa.com/savings-accounts/easy-saver?ito=87767&utm_source=msm&utm_campaign=mse&utm_medium=aggregator

Even if you are a higher rate tax earner you need to save a fair lump to break the £500 interest limit


#12

https://www.bankaccountsavings.co.uk/

is an online tool to get the most out of current and savings account offers - often a current account can offer a higher rate of interest that a savings account, but typically only for a couple of thousand at a time.

For example, Nationwides FlexDirect has 5% on up to £2500 for the first year.


(Dan) #13

Thanks everyone for sharing information :slight_smile:

So I don’t have millions to save, so spend all last night checking out different accounts and finally think I have worked out what to do!

I already have as much cash as I am prepared to lose tied up in Cryptocurrency investments… so… the best offer on the table seems to be…

Get my other half to refer me to Nationwide… she gets £100, I get £100…
Open a Nationwide FlexDirect with 5% on up to £2,500… slap cash into there… then open a further Nationwide Flexclusive Regular Saver which gives you another 5%, however, Max pay in of £250/month for 12 months so Standing Order £250 from FlexDirect > Saver

Should work out a good sum of extra cash after 1 year :slight_smile:

I wanted to stay with Monzo for everything but savings isn’t really on the radar at the moment so Monzo will just be my key account for spending!! :slight_smile: still love you guys!

Thanks
Dan


(Brandon Billingham) #14

Hi Dan :wave:

I was looking at the nationwide flex as well but I understood to get the £100 I’d need to move two direct debits there.

Does this need to be part of the switch do you know or can I do it after the switch? Is there a regular Pay in amount?

B Bank made it super clear what their terms were, but Nationwide less so! Keen to move there to max out on the interest.


#15

I don’t think the nationwide account has a requirement for direct debits, does it? In that case I would suggest looking additionally at accounts that pay cash back for direct debits.

Coop for example pays up to 5.50 per month if you have 4 direct debits coming out of there. (If my memory is correct, there is no minimum pay in.)

There are others as well, so have a think :slight_smile:


#16

Not for the 5%, but for the £100 switching bonus I think they do.


(Change Works) #17

Depending on how much more cash you have, it might also be worth considering a TSB account each.


(Brandon Billingham) #18

Seems for the 5% you need to pay in £1000 a month making it your main account


#19

That is true, though you can just do that through a standing order in one day then a standing order out the next day.


(Brandon Billingham) #20

Only part that makes me sad about that is it messes up the Monzo Spend :stuck_out_tongue: