what is the best type of savings account?

[No1toldmeaboutit]

I've recently come into some money, around £70k and i want to put it into an account which can earn some interest while I look for a property to purchase in the next 6 months - 1 year. I 'm not in any rush to but a property atm but will be at some point.

I have never had any savings other than an account I put money into for Christmas but that is just a regular account.

I have been looking at saving accounts and ISA and there seems so many for different purposes that it is confusing me. I want to be able to withdraw my money for a property purchase if required but other than that it wont be getting used.

Which type of account would be best, a savings account or an ISA. Does anyone have any advice?

An ISA is a savings account.

If you won't need the money for a year, then you are likely to get the highest interest in a fixed rate savings account.

If you want to have access to it within a year, then you need an easy access (or notice) account.

www.moneysavingexpert.com/savings/savings-accounts-best-interest/

Not advice.

Cash ISA limit is 20k per tax year and premium bonds 50k. Both pretty low risk options. Stocks and shares ISA slightly more risky. Some savings accounts have a good rate - have a look at Money Saving Expert. Lots of options - just get your laptop and a pad and see what you can find.

You can get around 5% on a few different accounts. 5% of £70k for a year is £3.5k so you need to consider the effect of tax, which depends on how much you earn. Therefore it's worth looking at ISAs and possibly also premium bonds as these are tax free and the stated payout rate is just over 4% so should be comparable with taxed interest based on average luck, although I'd put the money in a standard savings account until near the end of this month as you have to buy the bonds before the end of the month to qualify for the next draw - I think any you buy in July won't actually be entered into the prize draw until September, which does reduce the expected payout, but probably to a lesser degree than tax but that depends on whether you end up buying in 6 or 12 months.

For simplicity (assuming you've not already used your ISA allowance this year and don't already have PBs) you could put £20k in the best paying cash ISA and £50k in PBs, but if your timescale ends up being at the shorter end, the balance tips towards a normal savings account for the £50k and take the hit on the tax, rather than PBs.

Personally I'd put 20k into the Trading 212 cash ISA, paying 5.2%, and the rest in an instant access account paying a good interest rate (5%) while you decide what to do. Every single day that money is in your current account is costing you almost £10 in lost interest. Do that first, then consider your different options.

It might be worth considering a notice savings account where you have to give the bank notice of withdrawal:
moneyfactscompare.co.uk/savings-accounts/

Have a C look at the isa for buying a home where the government give you a bonus.

If you can wait 12 months to buy - I agree with pp put as much as you can in a lifetime ISA ( and again next financial year).
the government will pay a 25% bonus on house purchase. Look at Moneysavingexpert for good providers here too.

I wouldn’t bother with premium bonds unless you’re a high rate tax payer. With average Lucy you’ll get a 3.9% return on your money. I have accounts with Coventry building society, chase and ulster bank, all of which pay 5.2%. Ulster is backed by NatWest. It was a bit of a pain to set up but it’s a good account with an easy to use app and you can make as many withdrawals as you like without a penalty.

I am a higher rate tax payer so not sure how this would influence where I put my money.

i want to move it out of my current account so it’s earning some interest but also want to be able to access it just in case I see I property I like - although not actively looking if one comes up I want to be in a position to be able to purchase it.

i've opened a cash isa and moved £20k into so at least that element is earning some tax free interest.

so if i open another savings account and i am a high rate tax earner how do i pay the tax on the interest earned?

You claim it via your tax return. At least, that's how I do it.