Short term saving options - 1 year up to £5000. Suggestions?

[AGAR]

Hi,

Im looking to save £5000 over the next year to by myself a new car for my 21st. Each month i'll be putting away £450. Instead of paying this into a current account, what options do i have so i can make best use of the money when it is being saved.

I already have ISA's which are at thier maximum value for age, and i understand there are penalties for withdrawing from them prior to thier 3 year anniversary anyway so that count that out.

Any short term savings accounts with good APR's? Any other short term investment options so i can get the best return possible.

Hoping any returns on the money saved will be able to pay off my insurance.

Cheers

[Leftie]

AGAR said:

Hi,

Im looking to save £5000 over the next year to by myself a new car for my 21st. Each month i'll be putting away £450. Instead of paying this into a current account, what options do i have so i can make best use of the money when it is being saved.

I already have ISA's which are at thier maximum value for age, and i understand there are penalties for withdrawing from them prior to thier 3 year anniversary anyway so that count that out.

Any short term savings accounts with good APR's? Any other short term investment options so i can get the best return possible.

Hoping any returns on the money saved will be able to pay off my insurance.

Cheers

Moneysupermarket? ( see results below)

Some of the super current accounts are paying between 6 and 8% but I think there are strings. There are also some good regular savings accounts. I recall Allance and leicester had one buta gain there could well be strings like having to have your curent account with them and pay in a certain amount each month.

Are you a tax payer? If you are you will probably struggle to beat the Egg or Barclays ISA. Mail on Sunday or Sunday Times financial bit all usually has a list of the best rates. I don't recall there being any tie in period for ISAs?

Have a look at national savings too.

YORKSHIRE BS
Regular Saver Regular Saver 7.00% 5.60% 4.20% 7.00% £10 See Details Variable
Annually
3.50% 2.80% 2.10% 3.50%

Info:Min investment £10. Max investment £500 (per month).Our opinion: Details

MONMOUTHSHIRE BS
Saver Plus Regular Saver 6.70% 5.36% 4.02% 6.70% £20 See Details Variable
Yearly
3% bonus, conditions apply
3.70% 2.96% 2.22% 3.70%

Info:Min investment £20. Max investment £500,000.Our opinion: Details

PRINCIPALITY BS
Regular Saver Bond Issue 4 Regular Saver 6.50% 5.20% 3.90% 6.50% £20 1 Year Fixed
On Maturity
Info:Min investment £20. Max investment £500 (per month).Our opinion: Details

SKIPTON BS
Regular Savings Account Regular Saver 6.40% 5.12% 3.84% 6.40% £10 Instant Variable
Anniversary
4.90% 3.92% 2.94% 4.90%
1.50% bonus, conditions apply
Info:Min investment £10. Max investment £1,000 (per month).Our opinion: Details

HANLEY ECONOMIC BS
Regular Savings Account Regular Saver 6.35% 5.08% 3.81% 6.35% £25 See Details Variable
Yearly
Info:Min investment £25. Max investment £1,000 (per month).Our opinion: Details

BEVERLEY BS
Monthly Saver Regular Saver 6.30% 5.04% 3.78% 6.30% £10 See Details Variable
Yearly
3.30% 2.64% 1.98% 3.30%
3.00% bonus, conditions apply
Info:Min investment £10 (per month). Max investment £1,000 (per month).Our opinion: Details

DERBYSHIRE BS
Regular Savings Regular Saver 6.00% 4.80% 3.60% 6.00% £10 Instant Variable
Yearly
3.30% 2.64% 1.98% 3.30%
2.70% bonus, conditions apply
Info:Min investment £10 (per month). Max investment £1,000 (per month).Our opinion: Details

SAFFRON BS
Premium Saver Regular Saver 5.95% 4.76% 3.57% 5.95% £10 Instant Variable
Yearly
Info:Min investment £10. Max investment £25,000.Our opinion: Details

CHELSEA BS
Regular Savings Regular Saver 5.80% 4.64% 3.48% 5.80% £10 See Details Variable
Yearly
Info:Min investment £10. Max investment £1,000 (per month).Our opinion: Details

CHESHIRE BS
Regular Saver Account (5th issue) Regular Saver 5.80% 4.64% 3.48% 5.80% £25 See Details Variable
Annually
Info:Min monthly investment £25. Max monthly investment £500.Our opinion: Details

LEEDS BS
RegularSaver Regular Saver 5.80% 4.64% 3.48% 5.80% £20 Instant Variable
Yearly
2.80% 2.24% 1.68% 2.80%
3.00% bonus, conditions apply
Info:Min investment £20. Max investment £1,000 (per month).Our opinion: Details

BRADFORD & BINGLEY
Regular Saver Regular Saver 5.75% 4.60% 3.45% 5.75% £10 See Details Variable
Yearly
Info:Min investment £10. Max investment £1,000 (per monthOur opinion: Details

NATIONAL COUNTIES BS
Monthly Saver Regular Saver 5.70% 4.56% 3.42% 5.70% £20 See Details Variable
Yearly
Info:Min investment £20. Max investment £500 (per month).Our opinion: Details

HALIFAX BANK PLC
Monthly Saver Regular Saver 5.65% 4.52% 3.39% 5.65% £5 Instant Variable
Yearly
2.90% 2.32% 1.74% 2.90%
2.75% bonus, conditions apply
Info:Min investment £5.00. Max investment £1,000 (per month).Our opinion: Details

BANK OF SCOTLAND
Halifax Monthly Saver Regular Saver 5.65% 4.52% 3.39% 5.65% £5 Instant Variable
Yearly
2.90% 2.32% 1.74% 2.90%
2.75% bonus, conditions apply
Info:Min investment £5.00. Max investment £2,000,000.Our opinion: Details

BRITANNIA BS
Regular Saver Regular Saver 5.60% 4.48% 3.36% 5.60% £20 Instant Variable
Anniversary
2.60% 2.08% 1.56% 2.60%
3% bonus, conditions apply
Info:Min investment £20.Our opinion: Details

ABBEY
Monthly Saver Regular Saver 5.55% 4.44% 3.33% 5.55% £20 Instant Variable
Anniversary
Info:Min investment £1.00. Max investment £2,000,000.Our opinion: Details

NORWICH & PETERBOROUGH BS
Super Saver II Regular Saver 5.50% 4.40% 3.30% 5.50% £20 Instant Variable
Anniversary
2.50% 2.00% 1.50% 2.50%
3% bonus, conditions apply
Info:Min investment £20. Max investment £500,000.Our opinion: Details

ABBEY
First Home Saver Regular Saver 5.50% 4.40% 3.30% 5.50% £100 Instant Variable
Anniversary
Info:Min investment £1.00. Max investment £2,000,000.Our opinion: Details

MELTON MOWBRAY BS
Regular Saver Regular Saver 5.50% 4.40% 3.30% 5.50% £10 Instant Variable
Anniversary
3.25% 2.60% 1.95% 3.25%
2.25% bonus, conditions apply
Info:Min investment £1,000 (£10 local area). Max investment £500 (per month)Our opinion: Details

WEST BROMWICH BS
Regular Savers Regular Saver 5.45% 4.36% 3.27% 5.45% £40 Instant Variable
Yearly
3.45% 2.76% 2.07% 3.45%
2% bonus, conditions apply
Info:Min investment £40. Max investment £1,000,000Our opinion: Details

MANSFIELD BS
Regular Savings Account Regular Saver 5.40% 4.32% 3.24% 5.40% £25 Instant Variable
Yearly
Info:Min investment £25. Max investment £500 (per month).Our opinion: Details

NEWCASTLE BS
Monthly Saver Regular Saver 5.35% 4.28% 3.21% 5.35% £10 Instant Variable
Anniversary
3.35% 2.68% 2.01% 3.35%
2% bonus, conditions apply
Info:Min investment £10. Max investment £1,000,000.Our opinion: Details

[emicen]

Egg instant access is around 6.x% and easy to put money in to and out of.

Lloyds TSB Student Own account (dont know if this one still exists btw, you'll have to check) was offering ~0.8% per month a while back.

I believe as a student you should be able to get relief on income tax on savings interest but cant remember for certain.

[supercharged EK9 civic anyone? ]

[thewave]

Jupiter China Fund

I've made 36% in 4 months

past performance is not a guide to future expected returns, you may lose all of your invesment but might, just possibly, make a fortune

[AGAR]

emicen said:

Egg instant access is around 6.x% and easy to put money in to and out of.

Lloyds TSB Student Own account (dont know if this one still exists btw, you'll have to check) was offering ~0.8% per month a while back.

I believe as a student you should be able to get relief on income tax on savings interest but cant remember for certain.

[supercharged EK9 civic anyone? ]

Hmm good recommendations - especailly the EK9! I thought they fetched more than that though. Must look into that importing a bit more now.

Cheers for the replies so far. Jupiter China Fund sounds very risky so definatley a no-no.

At the moment i am on zero tax, being in full time uni education and earning below the threashold limit for the year (£4700 i believe?)

I'll undoubtably go over the limit this financial year but will not be clearing anything above £9K i should think. Am i correct in thinking this won't neccessiate the usual 17.5% income tax, but a lower tax nearer 10% (could be utter nonsense although i seem to remember reading that somewhere)?

What about other reasonably safe investment options? Stock market?

Thanks.

[emicen]

Your first £5225 earned is income tax free. The next £2230 you earn is taxed at 10%. Any income over that is taxed at 22%.

It basically doesnt matter where the income comes from, if its over £5225 you have to pay income tax on it. My understanding is that for students interest on savings is tax free, so you can reclaim the income tax the banks deduct at source.

[g4ry13]

I'm opening up an account with ICICI bank at the moment after ditching ING direct. Should get 6.3% return from ICICI and they promise to pay at least 0.25% over base which is pretty good

Edited by g4ry13 on Tuesday 7th August 22:25

[AGAR]

emicen said:

Your first £5225 earned is income tax free. The next £2230 you earn is taxed at 10%. Any income over that is taxed at 22%.

It basically doesnt matter where the income comes from, if its over £5225 you have to pay income tax on it. My understanding is that for students interest on savings is tax free, so you can reclaim the income tax the banks deduct at source.

Ahh i see. Excellent.

Now all i need to do is spend time finding the best account to suit my needs.

Cheers for the advice.

[g4ry13]

emicen said:

My understanding is that for students interest on savings is tax free, so you can reclaim the income tax the banks deduct at source.

I'm not sure if that's correct. Everyone has their tax free income and then once you're over it you get taxed. Nothing to do with studetns being tax free - just a lot of students don't earn over the lowest tax band. Otherwise loads of parents would give their kids 100s of thousands of £s to invest in a bank and get interest that'd be non-taxable.

[emicen]

g4ry13 said:

emicen said:

My understanding is that for students interest on savings is tax free, so you can reclaim the income tax the banks deduct at source.

I'm not sure if that's correct. Everyone has their tax free income and then once you're over it you get taxed. Nothing to do with studetns being tax free - just a lot of students don't earn over the lowest tax band. Otherwise loads of parents would give their kids 100s of thousands of £s to invest in a bank and get interest that'd be non-taxable.

Yeah, just checked it out and it isnt tax free.

Now I just need to figure out how that notion got in my head in the first place...

[Workshy Fop]

When I was a student many moons ago I filled in a form at my building society to receive any interest paid gross. I also had some shares at the time and got the dividends paid gross. Not sure if it works the same these days. Tax returns for all didn't exist then.

[Imran-vx]

thewave said:

Jupiter China Fund

I've made 36% in 4 months

past performance is not a guide to future expected returns, you may lose all of your invesment but might, just possibly, make a fortune

I have just popped a bit in there on the basis that where it was was doing worse than my bank could do, so gave it a punt.

I will of course hold you responsible if it bombs!