Saving of a small amount of money

[steve208]

If i am able to put aside some money in the near future what is the best way to do this. I am thinking i might be able to put aside say �5,000 for around 3 years. I would like a fairly safe investment as i invested in a unit trust many years ago and lostsome money. TIA

[dancecaller]

A cash only isa doesn't have the ups and downs of the stock market, the interest rates are good and free of tax.
Your allowance is �3000/yr so you can put some in now and some in an internet account ING, or Birmingham Midshires maybe) and put that in in April.
If you are married your wife has a �3000 allowance too

[Mrs_Pegasus]

Agree with dancecaller. Use up your tax allowance on an ISA. If you have an ISA already look at fixed term deposits where you are guaranteed a return.

[deso]

National Savings Investment account pays a reasonable return which is NOT taxed at source and now allows instant (a week or so) access with no penalty.

[WendyS]

If you're a taxpayer, I agree with the others that a Cash ISA is probably the best option to use up your annual �3,000 allowance, over two tax years if you will have the money in a lump sum.

If you're going to be able to save �5000 over a longer term by putting aside a certain amount every month, it's worth investigating the Regular Saver options offered by some banks like Barclays and Alliance & Leicester, where you can earn up to 10% interest for regular savings of up to about �250 a month. However, there is a snag to these accounts in that your main current bank account has to be linked to them.

If you're going for the Cash ISA route, check first that there are no penalties for moving the account as the Bank of England interest rate may well increase in November and you may want to move any Cash ISA to a more competitive rival if the one you invest in no longer offers a good rate.

[steve208]

thanks wendy.

I will have a look at the national savings option. I have looked at the many savings accounts which are "linked" to current accounts but on my current wages it is not anoption to use these as at least �1,000 must be credited to the current account.

Oh well there are plenty of products out there will see what i can do.