Savings Accounts

[Dagman]

Hi ABers. Can anyone suggest the best saving account (uk) based on the following. I would like to save £200 a month for ten years. I am not likely to dip into it but should that happen, I don't want to be penalised. Also I do not want the taxman clawing anything too (I've already paid tax when I earn it and when I come to spend it, so I begrudge it being raided!). There are many offers from banks etc but most have some problem unless it's a poor interest rate. Any ideas appreciated....TIA....Dagman

[gingejbee]

As usual, Which? has all the info you require:

http://www.which.co.uk/money/savings-and-investments/guides/finding-the-best-savings-account/

[Gizmonster]

For tax free interest, invest in an ISA.
I would only tie in for a few years though, as interest rates may rise in the next few years and then you'll be left tied in ......
I know rates are a bit naff at the mo, but they're naff everywhere ..... if you want higher interest rates, you'll prob have to commit to a longer term, or you'll have to consider riskier options, such as shares, etc.
My opinion: invest in an ISA for no more than 3 years and then when the 3 years are up, weigh up what's on offer and invest in the best option available ......

[ubasses]

First Direct are doing a regular saver paying 6% gross. You would have to weigh up any tax you pay on the interest against a lower ISA rate but it could still come out better. It is only for 1 year and you would have to put the accumulated balance elsewhere. Hopefully they would offer another good rate for for the next 12 months. (they have been doing this for many years).

[Dagman]

Thanks very much for your replies. I may go down the route of a fixed rate ISA for three years as you suggest then look around for another account which won't impose a penalty on withdrawals.
I've just noticed the ad below this asking if you've a £250,000 portfolio for retirement! I wish :(

[237SJ]

Have a look at thisismoney.co.uk for savings rates. I was going to put a link on here but cut and paste doesn`t seem to work on that site. I`m not sure I would do a fixed rate at the mo - if the economy is improving, you might miss out there but that is up to the individual and it is all a gamble.

[Gizmonster]

Check out the Santander 123 account.
It's a normal run of the mill current account, but it pays 3% on any money in the account from £3k - £20k. You get nothing on the first £1k, 1% on £1k - £2k and 2% on £2k - £3k. There's a charge of £2 per month, but you also get cashback on your direct debits which will usually pay you more than the 2% charge.
Best of all, it's completely flexible .... you're not tied in, etc ..... might be worth considering ?
http://www.santander-products.co.uk/banking/media/123.html?urlgen=y&exp=60&cm_mmc=123hpntgfs-_-hpntg-_-123ca-_-123hpntgfs

[grasscarp]

If you don't already have premium bonds to max £30,000 why not buy 200 every month. It earns no interest, but you may win money and that money will be tax free. It is also easy to take out money if you need to.

[hc4361]

You have to pay £500 a month at least in to the Santander account and have at least 2 direct debits. Also tax is paid on the interest.

[ToraToraTora]

bung it into premium bonds, interest is jack anyway and you might win something worthwhile.

[boxtops]

Have a look at Nationwide - not sure what their current deals are, but last year they were offering a good interest rate on a Regular Saver account, where you had to put in a min of £250 p.m.

[Hypognosis]

If you want to keep an ISA running year-in, year-out, without the hassle of renewal/provider-switch paperwork each year, then get a product which has an auto-renewal option as a feature.

The one I use is conditional on 'regular incoming payments' and the bank seems to have no objection to me having reduced this to a token tenner per month. I can then manually pay in irregularly during the financial year and finally top up to the annual ISA limit in Feb/March. Very flexible, no penalty fees.

[puzzled54]

I would go with the premium bonds. No interest, but no tax on winnings and you can have the winnings automatically put back into more bonds.

[Dagman]

All great replies thanks. I will certainly look into these options. Cheers all.

[Dagman]

Hypognosis, which bank are you using that offers the auto renewal? TIA