Should I save 20% of my income in an account I can't access?

[HeartsofOak]

I'm just looking at 6% interest account which does not allow access to the saved money for 12 months.

I'm hesitating because in the last few months I've been at £0 by the end of the month. Every month something has eaten into the money I wanted to put by eg car, TV went bang etc.. I feel very vulnerable without any ££££s saved.

What proportion of your income do you aim to save, or what proportion of your 'disposable income'?

Which account gives such high interest?

Why not put 10% into the fixed account, and 10% into town accessible account.
Then if you need money, you can get it. If, in 6 months time, you have loads of spare cash in the instant access account, you could increase the contributions to 15 or 20% into the high rate account.

6% where have you found that? I barely manage 1.3%.

Long tie in does give higher rate but you usually have to put in lump sum at the beginning, not trickle feed it.

If you can afford to save 20% of your income, then certainly you should save it and put some of that saving in to longer term investment products after you have a sufficient instant access buffer (3-6 months salary).

I would be wary of any account giving 6% atm.

I get 3% which is about the best rate going for small amounts.
Big interest is big risk, and doesn't sound as is you can afford to speculate.

The account is a HSBC 12 month savings, I saw it the other day, nothing to be wary about and no 'big risk'.

Hearts, double check this but I think the money is accessible, you just don't get the interest if you take it out early.

BirdIsland- off topic, but have you been to Bird Island?

Pearly sadly not! Hope to one day though.

It's stunning, do try to make the trip.

Is it the HSBC account?

Regular saver account?

I've got the first direct regular 6% saver and put £300 in a month. You can ring and change the amount put in every month if you're having a lean month. We have a bit of savings in an easy access account, so if we can't afford to save £300 one month I top up from instant access savings.
Could you not just Dave the minimum amount and just top up some months when you've got spare money rather than committing to 20% of your income each month?

PS I find that if I have my savings come out along with any other bills on the first of the month then I live with what's left until next pay day, whereas if I put savings away at the end of the month I'd never have anything left...

I think it is the HSBC account under the guise of M&S Bank.

The account is closed if you withdraw any of the money.

It's more the % of my income. I suppose there's nothing lost if things goes pear-shaped and I have to get at the money.

My question was motivated more by thinking about what I should expect of myself and discipline on spending/saving.

I've done the HSBC regular saver one for 2 years now. Pay in £250 a month and get 6% back at the end of the year. I have all my savings etc go out on payday so know exactly how much I have left to play with

We probably spend about £100 a month on treats after bills and everything else goes in savings. We then use some of our savings for a holiday every year.

It is a monthly saver. Remember that you don't get 6% on the whole sum, the a e r is much less. Desperate times, desperate measures..

I have other savings too. That is not the whole 20% of income.

I know I've got a big cost coming up in the next 12 mths as my ds is getting married and I've foolishly said I will contribute. But I'm not sure if I will need to get at that account to pay the contribution iyswim.

If you are too wary about tieing up the money, what about the TSB account where you get 5% in the current account and 5% in the linked savings account, but the money is not tied up - you can withdraw from either if you need to?

You only need to put £500 in the current account each month, but you can cycle it round by standing order, if you don't want to put your salary in there.

Pearly, Cindy. It's quite easy to get between 3 and 5% interest on a range of current accounts plus other benefits like free cinema tickets or the cashback which usually covers the monthly fee on the Santander 123 account.

Look on moneysavingexpert. Sometimes but not always you might need to set up a direct debit or two and there are sometimes but not always minimum funding requirements, but you can just pay the money in and out again by faster payments or standing orders. ISAs and traditional saving accounts don't really serve much purpose currently.