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Old 09-23-2008, 08:44 AM   #1
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Default savings account

ok, so i want to save around £2000 and build up interest on it. seen a few good accounts, but im no expert. should i get an isa or a savings account, and which one is best?
UK banks only please.
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Old 09-23-2008, 08:53 AM   #2
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Default Re: savings account

instead of savings why not go for premium bonds?

the more you put in, the higher chance of winning prizes, my boss put about 30grand in and wins like 50pound here and their, also he won £500 which is the most he has won of bonds.

lol


http://www.nsandi.com/products/pb/index.jsp

the gov bond is very good

http://www.direct.gov.uk/en/Diol1/DoItOnline/DG_4017782


But then again, they can be worse then the average interest rate,the more tax you pay, the more likely you'd win.


What about stock market? lol why not buy some shares hehehe
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Old 09-23-2008, 08:53 AM   #3
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Default Re: savings account

Why did you post this in hardware / software?
As for the answer to your question, it depends on how fast you want to get your money back. Saving accounts are a slow way but short term cd's will yield higher returns over a shorter amount of time. Trouble with cd's is if you want to make a high yield return you have to invest a lot up front.
CD's will kill you with early withdrawal fees if you change your mind and take your money back out before the term is up.
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Old 09-23-2008, 09:01 AM   #4
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Default Re: savings account

I know I can't see him makeing more then £200 a year
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Old 09-23-2008, 09:52 AM   #5
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Default Re: savings account

wow im a d**k, but im priv so ill move it haha,
then ill read the comments.

edit: ok, firstly whats a CD?
secondly, a bond ... hmm. possible i guess, but how does it all work?
i wouldnt mind saving it all up for about a year. no longer than that though. seen some savings accounts which offer around 5-6.5% AER, so im looking at around £100-£150 a year, which is kind of crappy but might aswell make it if i can.
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Old 09-23-2008, 10:11 AM   #6
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Default Re: savings account

ISA.

Completely untaxed, but you can only deposit into one ISA per tax year and into that ISA you can only deposit up to £3600.

Normal savings accounts don't usually have great interest rates unless you're tax exempt (which you will be at this stage).
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Old 09-23-2008, 10:15 AM   #7
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Default Re: savings account

hmm ok.

grow with an eSaver
5.62 % AER

(variable)

Enjoy a rate of 6.56% AER


that one looks good ^ ... or theres an isa one with 6.2% or something. alliance and leicester have an 8.5% current account, but doesnt that mean id have to use it? and the other condition is you get that rate if your balance is under £2500
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Old 09-23-2008, 10:22 AM   #8
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Default Re: savings account

you should get bonds, the gov bond is where the gov borrows your cash and you still have it.

they have around 36billion £ in bonds

half of uk owns bonds.
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Old 09-23-2008, 10:32 AM   #9
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Default Re: savings account

aww the more i research the more confused i get lol.
i may sound noobish but ive only just realised what a bond is not sure if im liking the idea of it. i just want to make as much money as possible. this sounds like a bad gamble with a bad outcome.
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Old 09-23-2008, 11:34 AM   #10
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Default Re: savings account

Antdemo seems to have fallen under the same spell as the rest of the fiscal world that has lead to the credit crunch.

high returns generally involve high risks.

Quote:
Prize draws Instead of paying interest, Bonds are entered into monthly prize draws. Remember that inflation can reduce the true value of your money over time.
so basically you might get nothing...

£100 put into a savings bank with a yearly interest rate of 6% would see ~£6 profit at the end of the year. (but inflation of 3% means that your £100 is worth 3% less than it was last year). (i.e what cost £100 this year costs £103 next year), but that's ok, cause you've got £106 and have made a profit of £3...
with bonds you don't get interest, so assuming you don't win anything you put in £100, at the end of the year you've got £100 but due to inflation, in real terms you've actually lost £3 in value because money is just not worth as much this year as it was last year!
(assuming that you don't win).
of course if you do win you *could* be a £1,000,000 better off next year than you are this year.

so you have to assess the cons of your money being devalued whilst say idle against the pros of it possibly winning you a fortune.
with the banking method you have to assess the pros of lending money to a bank and getting a few quid extra. against the cons of not even being entered to win millions of quid...


ISAs can be a tricky business too. a lot of them only give you a high rate of interest with regular deposits. so it's all very well thinking that you've got a high rate of interest, but if you are short one month and can't pay into it, you loose that rate of interest. and possibly have to pay a penalty also.

Savings accounts are by far the simplest... put money in, take money out. earn small amounts of interest during the bit in the middle...

stocks and shares are by far the most risky, but by far the most rewarding.

If I had had a spare hundred pounds last week I'd have invested it into barclays bank on Tuesday when shares were falling. a week later they are up around 30%, so I would have made £30 in 7 days, more if you do to long term investment.

(assume that HBOS was still independent), it's share prices were a tenth of what they were a few years ago. investing your £2000 in shares now whilst they are low could see a massive return in a few years. i.e 2,000 in now, 20,000 back in five years...

but there is also the risk that you put 20,000 in five years ago and now the company messed up and your investment is now only worth 2,000 so you make an 18 grand loss...

The truth is that it's really up to you.

personally I'd choose to put the money into a savings account and get slow and steady interest, because that's easy to manage and pretty much risk free, and you're pretty much guaranteed that your money will accrue interest at above the base rate of inflation.

with an ISA, there are added complications of how and when you can take money out, and possible penalties to consider if you can't follow the scheme to the letter, which although you may find easy to do now. you may not be able to do in a few years.

bonds, are practically risk free, but your money never grows, it only shrinks and devalues, and since i's a lottery scheme, you're never guaranteed to get anything from it.

stocks, well take a look around at the world. if you want to go that route, now is definitely the time to do it. but don't expect a massive and quick return. and expect to have to keep our 'finger on the pulse' to know exactly how and when to move your money. (also expect to pay taxes and fees for buying and selling) and if you go to an investment consortium so that you don't have to monitor share prices yourself and have someone do it for you (or your group) expect to have to pay fees to them too.
also don't be surprised if in a single day your stocks are devalued by half, and you've lost half your lifes savings!

finally one thing I didn't mention earlier is commodities trading. this is especially big with things like oil, (and some say has led to artificially inflating oil prices).

basically what you do is buy barrels of oil.
when you buy oil you pay (lets say $100 a barrel), but you don't actually receive that oil, instead you sit on the deed for a month, then when the month is up you go and collect your oil.
except you don't (because you have nowhere to store and nothing to do with a few hundred gallons of crude oil!).
instead you sell the oil before you even see it, (you sell your deed to the oil) and hopefully inside of that month the price of a barrel of oil has gone up.

theoretically this can be done with practically anything, but it's just as risky as buying shares really. and a lot of hassle and hard work.
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