savings-best place to stash the cash?

[baremission]

Im trying to save up to buy a car, i currently have about �1000 that I add to everytime i have a bit of money spare which isnt that often. The money is currently in a halifax savings account but is there a better place i should be saving it to get more interest or something? Ive not done any research into interest rates because I dont really understand all that stuff. Would an Isa be a good idea or is that something unrelated? thanks x

[factor-fiction]

Based on an average savings balance of �1000 you can expect to earn around �40 interest a year based on a typical rate of 4%. But there are accounts paying quite a bit more. If you can get one at 6% that gives you �60 a year. It's up to you whether you think the additional amount is worth the hassle of swappng accounts, and sometimmes if you change accounts you lose a week's interest (maybe �1) while the money clears.
But remember that if you pay tax you lose a fifth of your interest- so your �60 could fall to �48. So consider an ISA where interst is tax free and you can get a good interst rate. Many allow withdrawal without penalty at short notice.

[888sally888]

How about premium bonds - you may win the �1,000,000!!

[baremission]

well, i have got just �100 premium bonds..just so im in it to win it although its unlikely with that amount obviously. i would put the whole lot in premium bonds but i feel like its a bit remote, i like to be able to go on the internet and see my balance, i dont understand how the premium bondsthing works...how do they not just turn around and deny ever seeing your money?

[Bewlay Bros]

Open up an ING account. I think they are paying 5.7 at he moment.

You canb get margnally better but we are looking at 2-4 pound per year, so not really worth it.

ING is solely set up n line and easily transferable from and to a current account.

So what you can do is put all your money in there for a month and then take your bills and spending out of it as opposed to doing what you are doing the other way round.

That way, you will have your wages earning interest before you spend it. Set your direct debits up a day BEFORE you get paid in a month arrears.

This will maximise interest earnt on your money before you spend it.

[Bewlay Bros]

Premium bonds are fun, that is it.

The real interest rate is under 1 percent.

And the odds of winning ANYTHING (most prizes are �50 are about 24000 to one.

[baremission]

thanks this is all most confusing..ill look into ing. x

[Bewlay Bros]

Easy.

1) Keep your current account for direct debits etc.

2) Open up an ING account on line using your present current account as your main donor/receiver (ING is NOT a current account)

3) Get paid as per usual in to your current account (ING will not accept direct debits, wages etc in to it)

4) Try to set your direct debits one day before you get paid.
This means, in theory you will have most of your wages in the bank for a month. However----------put this money in ING, so for nearly a month you will earn 5.7 percent interest on your wages.

7) a few days before your direct debit, go on line and withdraw the cash from ING back to your current account. ING is solely trading on line and is very easy to do this.

8) Leave what you can afford in ING thus accumulating interest and capital.

[Twenty20]

If you look at Alliance & Leicester saving accounts for instance, most are paying around 5.75%. If youre saving regular amounts for a year with no withdrawals and other restrictions you can get up to 12% but that might not be suitable for you. Many other bank/building society accounts will probably earn similar interest rates. Have a look around but make sure you are aware of any restrictions - for instance on the withdrawal of money.

Premium Bonds pay an interest rate of 3.8% but that goes in to the prize fund and you may not win anything and therefore get no interest at all. Premium Bonds can be fun (the chance of winning a large amount) if you have money 'spare'. With Premium Bonds you get certificates showing how much you have invested and it is the numbers on these Bonds which are entered into the monthly draw.

[mandimoo]

if you are in a position to do this, you could open an account and they give you �100, and if you close it after 6 month you get �200. make sure you read the small print, cos i didnt x

http://firstdirect.com/index.html

[Whoever]

I can't understand why people recommend ING. They are a lousy institution who give their savers a bad deal and there are lots of better places for your regular savings. And your chance of a big win with �1000 of Premium Bonds is virtually zilch. If you are a taxpayer, an ISA is your best bet as the interest you earn will not be taxed whereas interest earned on other savings accounts is.
Checkout : moneysavingexpert.com. There are lots of threads on there giving details of the best interest-paying ISAs.