How would you save £50 a month?

[IndieRocknRoll]

I know it’s a tiny amount but I have a small savings account that I have instant access to plus we have family savings. I would like a small pot of my own that I coukd grow. I wouldn’t really notice £50ish a month or so and I could just leave it be for the next 10 years or whatever.
What would yield the best returns? ISA, stocks & shares ISA? I’m a basic rate tax payer if that makes a difference.
Thank you!

7.3% monthly deposit of £1 to £200 fixed rate. Principality Building Society. Apply online. Easy and quick. 6 month period.

If you can leave it invested until pension age, that's the most efficient option. Next best for 10 years is a low-fee stocks and shares ISA.

Vanguard stocks and shares ISA.

Vamguard is no longer the best option for small amounts. They've increased the fees considerably.

im interested in the replies too.

look for a year long fixed rate saver, they usually have penalties where you don’t get the full amount of interest if you withdraw but it still makes it accessible for you.

ISA is also an option but when I looked a few months ago doing the 12 month fixed was better rate than a fixed ISA & deffo more than a standard one

Savings accounts always lose out to inflation. If you want to grow the money in real terms it needs to be invested rather than saved.

Interested as well, bit scared about going into investment as had a sting when I lost all my money.

When do you want to access the money? If you can wait till age 57 or later then a pension will be your most efficient option. If you want it sooner then a stocks and shares ISA.

Over 10+ years investment growth upside far outweighs cash savings interest rates. The downside risk would be a short term market crash coinciding with you needing to take your money out.

Stocks and shares isa
trading 212
world etf (lower fees than vanguard are invesco all
world or ACWI MSCI) go for the accumulating version as then any dividends are automatically reinvested
can be set up to do automatically

some great places to learn more:
on Instagram the accounts ‘stocksandsavings’ or ‘neilinvests’

a return on this could be budgeted at 6.5% to account for inflation
could be 8%

if there’s a market crash don’t sell (and lock in the loss), just keep investing the £50

apolgies for bullet points, it’s past my bedtime!

Play around with a compound interest calculator to compare returns!

Trading212, global ETF like S&P500. Compound interest over time is so much better than a general savings account.
plugging the numbers into a calculator at 5% (to account for inflation) would give you around £7750 after 10 years.

Trading 212 is offering free shares for new sign ups at the moment! Here’s my link if you would like to use it: up to £100 for us both!!

https://www.trading212.com/invite/199hc2P3YN

trading 212 is great as the platform itself has no fees to use and the app is really easy to use

If you are in receipt of UC you can get ‘help to save’. 4 years and the government will give you 50% of your savings as a bonus. Maximum in is £50 a month.

Thanks all! Lots of advice. I’ll take some time to look through it all. I would hope to not touch the money for at least 10 years so had wondered about a stocks & shares ISA. I don’t really want to pay fees though when it’s a small amount so that would definitely need to be a consideration.

S& S ISA would be best. There are a few fee free platforms and T212 is a good one. Pick a simple global ETF which is not too US heavy and which matches your risk profile. Keep putting in your £50 but don’t focus on the short term ups and downs. The important thing is to be regular and consistent and don’t make any changes to it in a panic. Whilst the platform fee is zero all ETF’s will have a ‘fund fee’ but you can compare that before you pick your fund. Passive funds are cheaper than active funds. Most active funds are no better than passive ones but there are exceptions.

Over the past 20 years, the average annual return on the FTSE100 has been 6.4% and on the FTSE All World index 9.1%.

The best cash ISA at the moment the is 4.4%, and rates are generally falling.

Paying a small fee for the former will give you a better overall return than the latter. Don't write off an option because it 'costs money'. Lost growth is also a cost.