Where to put savings?

[pannikin]

We have recently had a major boost to our income. As a result we now have gone from being able to save a couple of hundred on 'good' months, to to having the best part of a grand a month to save now. I don't know where to put it, though.
I don't want to make the wrong decision. We have no debts to pay off and our main priority is to save for a house deposit.
Where are we best investing this money for the following reasons:

1. I would like some easy to access savings for rainy days, especially as we have young DC.
2. I would like something that pays better interest than the crappy interest rates that we have on the savers that came with our current accounts.

I've been reading about the help to buy ISA. Has anyone had one and found it worthwhile?

Are you a first time buyer? (Assuming yes as you're saving for a deposit?) You could possibly open a Lifetime ISA and save £4,000 per year. The interest rate isn't great but you get a 25% bonus on whatever you invest.

A regular saver is a good option too, you normally have the option to make one withdrawal so a little flexibility. Maybe open an instant access account and save a small amount that you can access at any time?

I don’t think a Lifetime or Help to Buy ISA would suit you as you can’t withdraw from it until you reach pension age or buy a house. Well you can, but you will loae the government bonus.

Bank accounts are generally shit. Top rate at the moment for an easy access is a tad over 1.2% (unless it’s a more tempting rate for the first £X only).

It sounds like you will have a decent amount to put away each month, why not speak to a financial advisor?

@19lottie82 that is true, there is a 25% penalty for an early withdrawal that isn't for a house purchase. The max you can put in the lifetime isa per month is £333 approx so if OP has near to a grand to save she could use some of that to save in the Lifetime ISA and the rest could go into easy access. It is a risk though, if an emergency crops up and an early withdrawal needs to be made, I would also probably speak to an IFA OP.

Sorry just to correct my previous post, the max you can put in the Lifetime ISA would be £4,000 per tax year, so split up throughout the year would be £333 approx.

Financial advisor is a good idea, didn't think of that as assumed they were for people with a lot more money than we have! Yes we will be FTB. Really hoping we can get on the housing market soon as it is so expensive to rent :(

IAm that’s a good point!

Halifax child saver account yields 4.5 percent fixed for a year. That might be a good start.
Savings then move to the lower rate automatically - its around 2 per cent I think.

This is a bit small fry for an IFA. Unfortunately your best bet is a H2B ISA then any regular savers or online savers that you can access. MSE is your new friend!

there are no cash savings rates anywhere near inflation unless you want to chance the tsb - and their 5% is only on £1500 so it isnt worth the effort. stash six months expenses and the rest goes to pension and stock market. with the risk of the latter.

mark carney will not be moved.

The best interest rates are on current accounts on relatively small amounts. You can open current accounts at Tesco, nationwide etc and pay in up to the maximum. These often have linked monthly savers at 3%+, again there are maximum limits.
You can have two Tesco accounts each at 3% and a NW at 5% It's a faff but DH and I hold lots of current accounts like this to maximize our interest. I don't think it would be worth the cost of a FA for you, just do your research.

I’d do combination of:

Lifetime ISA first, this will give you 25% bonus and you can take out money to buy a house under £450,000 I believe. No need to wait till 60 if you’re buying a house.

Best current account rates, max out at least 2 accounts

Premium bonds for the remainder, you might win a big cash prize!

the current account trick is nearly over. tesco pulled the accounts that made the fake direct debits so now very difficult. lloyds and bank of scotland crashed their rates to 1.5% and so will tesco before long.

Premium bonds?

IMHO Premium Bonds are OK for a bit of fun, but not a worthwhile investment if you’re looking for a guaranteed return.