ok im 21 and have no clue about saving...

just started working now ive finished uni and i want to start saving money so i have it there for the correct housing market.

i want a good high interest safe account... obviously
i shouldnt need to access the money at all however i would like an option to in case of emergencies and im willing to take a penalty if so.
i want to open it with a couple of thousand and add to it monthly with my spare cash.

what and where do you suggest???

thank you

I would start by opening a cash ISA. You can save up to £3,600 a year and the interest is tax-free.

The Barclays Tax Haven ISA is probably the best of the instant-access ISAs at the moment, and pays 6.25%.

You can withdraw at any time (as with most cash ISAs) but you cannot deposit more than £3,600 a year.

thank you for the reply, a few people have suggested this ISA....

questions:

will my money be safe?
where to put the rest of my money, can i open another Cash Isa and just pay a bit of tax on the interest earned??
Are cash isas the safest?

thanks

Northern Rock e-saver-6%, NR supposedly the safest bank as now owned by the gov't.... unless the govt go bust and if they do you wont be worrying about loosing your savings!

You are not supposed to open more than one cash ISA in a single tax year, so I imagine the bank would refuse to open the account if you tried to open a second ISA. I wouldn't recommend trying to go above the £3,600 limit - the deposit may be refused or you may be charged tax on of all your interest, not just the interest on the amount above £3,600.

If you earn more than £1,000 a month after tax and your student loan, I'd start with opening a Halifax High Interest current account. You can earn interest of 5.12% up to £2,500.

Once your used to your salary, and what you can save, I'd open a regular saver. However it would be good to get tax free savings first! It really depends on what you think you can save...

thanks guys

so can i open a new cash isa each year hence having

1year allowance of 3600 followed by
2nd year allowed another 3600 in that account and another new account to put 3600 in

basically can you only save 3600 cash isa per year or can it go up by 3600 per year if you open an isa each year??

i aim to save about 5-6000 for next 2 years followed by 10000 per year after that until i feel that the house market is stable, but i want safety over proffit

thanks again

No, you can only save £3,600 in cash ISAs each tax year. You can add to your existing ISA if your provider allows it or simply open another cash ISA.

i see

so after the 3600 per year i would be best off saving as usual in a high interest account and just paying tax on the interest i earn as opposed to putting money into non cash isas if i want safe savings??

so save 3600 in an isa per year, followed by as much as i want in some regular savings account where i pay tax on interest?

Yes

Have a look around here for some good rates: http://www.moneysupermarket.com/savings/

Which bank do you have your current account with? They might offer some good deals!

been with barclays a long time,

ive just thought... i can get my girlfriend and my mam to open isas too cant i ?

BARCLAYS
Monthly Savings Account Regular Saver 7.75% 5.99% 4.49% 7.49% £20 Instant Fixed
Monthly
Info:Min investment £20 (per month). Max investment £250 (per month).


so AER is 7.75 and net is 5.99 and hrt is 4.49 and gross is 7.49 then what do i gain, and will my money be worth at least the same in 5 years as when i put it in if inflation goes crazy to bail the government out??

They can open ISAs, yes. But in there name using their allowance. I'm not too sure what you mean exactly, if you are considering putting your cash in their savings account it could cause problems for you. The law would see it as their money, not yours.




Who knows what your money will be worth in real terms, it's something all savers have to contemplate. This is why savers chose other accounts like index linked, and other asset classes as gold.

Assuming you have no or little savings currently, it might be a good idea to start that regular saver at £250 a month. Anything over that you could drip feed into another instant access savings account. You don't want a situation where you spend to much on 'life' and have to go into your overdraft.

In March, before 6th April you could move money out of your regular saver (do this at the very start of the month) and your standard savings account to put into a cash ISA using up this years allowance. It might be then a good idea to go for a fixed ISA, then continue to add to a new ISA after 6th April (the next tax year).

thanks for all your help, i think i will take your advice

open regular saver

transfer 3600 to cash isa before april 2009 (do banks allow a big Isa transfer like this???)

then open a new Isa the following tax year and put in what i think i can afford judging by my savings of the previous year.

Yes, most banks will allow £3.6k into a new account, although it's dependent on the terms and conditions on each individual account.