To ask how you would split £27k? …

[bankingpanda]

… into two savings account?

1. ISA - max. I can put in there is £20k. It’s tax free. Interest rate 2.85% AER
2. Savings account. I believe no limit on what to put in there. I get taxed on this. Interest rate 4% AER

currently I have no money in either of these accounts (apart from the £1 I needed to put in there to open them)

I’m struggling to know what to do. Really want to put the money into savings account as so far it was just sitting in my bank account 🫣

I’ve instant access to both accounts if I need to, but I also I’m thinking of leaving about £3k in my standard bank account so I don’t need to touch savings at all.

thoughts?

If you are a basic rate tax payer the first £1000 of interest is tax free so you could put £25k in the savings at 4% and pay no tax. I think you should look at a lifetime isa assuming you are aged under 39. It looks like a no brainer.

First thing you should do is get a better ISA.

No it really isn't

Open a Moneybox account and put £20k into it for this tax year. Then when the next tax year begins in April put another £5k into it. You could set up a direct debit for a nominal amount per month which would leave you with some funds in your current account.
I recently helped my friend set up the same account. It had been sitting in her account for a few years making absolutely no interest. She was delighted to tell me she could see it had made her £27 in a couple of weeks.

Yes, but that's the money she has worked for and she has saved. It hasn't landed in her lap. She could have spent it and had no savings - would that suit you better?

Move your ISA, that rate is shite. I'm on 4.5 until April then moving to virgin for 5.25%.... dump 20k in now and the next 7k in April.

IIRC you can open one ISA per fiscal year, so if you can, get an ISA with a better rate. If you're not willing to risk your money by putting it in a stocks and shares ISA then find one with the highest interest rate return.

You should put a little bit in premium bonds for fun. Why not?

Well done for saving so hard for so long. It's quite the achievement! I have no idea why people in the UK are so bitter if somebody is doing better than them. I'm pleased for you.

Tone Deaf?

People discuss holidays, mortgages, second homes, en-suite bathrooms and expensive kit on the forums, none of which I have. Nothing inappropriate in asking the knowledgeable members here about the best way of looking after the modest amount of £27K.
You are being petty. it’s not poverty top trumps and you will have a great deal more than some other posters. If it bothers you, you need to find a purer and more selfless site. Possibly with self-flagellation as a board.

I have an easy access savings account which pays 4.1% and you could put the whole 27k in it (Chase) so I vote neither - get an account with better interest rate and stick the lot in there.

@worriedandannoyed @PamelaParis I can't believe the way you two are brazenly showing off your ability to type and the fact you clearly have a smart phone or computer and the time to read Mumsnet. Don't you realise that we are in a cost of living crisis and there are people who can't afford technology, have to work 18 hours a day to make ends meet and can't even read? Tone deaf responses.

In what way?

Im not sure I get this?
If you have savings in a normal savings account, for me Yorkshire Building Soc paying 4.8% and then transfer to monthly Regular Savers with higher rates... how are you only getting half the interest please? Surely if I have say £100 in YBS it earns 4.8% there until I transfer to the First Direct at 7% at which point it earns 7% 🤷‍♀️🤷‍♀️🤷‍♀️

Ffs, I'm ridiculously skint and would love to have 27k in the bank but I don't begrudge anyone who does. Its sensible to ask what to do with it. OP well done for saving so much. I have no advice but your post is completely reasonable.

@myfavouritecolourisnotpink, it's not a daft Q - it's because it's a regular saver, so you're only putting a certain amount of money in per month. The 1st £100 (say) that you put in will be in the account for the full year, but the last £100 will only be in for a month. So, if you're thinking about how much interest you'll get, you can't just think Oh, it's 7% of £1,200, because the whole £1,200 hasn't been in the account for the full year. To work it out (possibly slightly roughly), you work out 3.5% of £1,200.

It's still better than leaving the money in a 4% Chase account or whatever, it's just that you're limited by how much you can put in and how quickly.

Yeah.. Thanks for clarifying 😄
Thought I was missing something there... 😅
Obviously any money in an account only earns that interest when it's in that account..
Therefore I meant that if you don't want to lock away savings into a Bond (and you have maxed out your ISA allowances - ISAs are particularly good if you are a higher rate tax payer) pop the savings into the best normal savings account you can get.. For me rn it's Yorks Build Soc 4.8% and then transfer monthly from there to regular savings accounts... Nationwide does an 8% one.. to max out the interest..
😄

Another useful money for nothing trick... Spend all money you spend on a cash back credit card, then transfer every penny of that money into higher interest savings account for the month.. Pay off your credit card IN FULL every month., earn cashback/rewards on your spending and get interest on the money you have put to one side to pay your cc....

I have earned a lot of money over the years doing this 😄

There are better ISA rates around than that. I'd max out the ISA and put the rest in your savings.