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Savings Account? Interest after 10/15 years :S

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Leviathan91 This post is not being displayed because the poster has bad karma. Unhide this post / all posts.

Ste
Not Work Safe



Joined: 01 Sep 2002
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PostPosted: 23:41 - 20 Feb 2010    Post subject: Reply with quote
There's lots of different things it could be, it'd be worth asking your parents to find out what type of account/investment it is. It could be a trust fund, it could be a gilt bond, it could be a distribution bond... there's lots and lots of different things it could be.

Withdrawing from it before it matures will cost you, for some accounts if you withdraw from it then you get a lower rate of interest, for some investments if you withdraw then the price you get for each unit will be lower than what it's worth on paper and what it'll be worth when it matures. The better rate of return you get on the money, the bigger the penalty will be for withdrawing from the investment/account.

Do you have any paperwork for it? Otherwise, ask your parents what type of account or investment it is. Thumbs Up
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Sparks!
Sir Tart-a-lot



Joined: 30 Aug 2003
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PostPosted: 00:00 - 21 Feb 2010    Post subject: Reply with quote
Don't touch it! Keep it for when you're ready to buy a house else you'll regret it... I didnt have any money from parents but I regret not saving for a house earlier on in life.. I'm only 24 I guess so not old but I could have had a house by now if I saved a bit and regret it now! Get a job and work hard and leave the savings bond for when you want a house deposit Wink
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ms51ves3
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Joined: 08 Jun 2007
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PostPosted: 01:13 - 21 Feb 2010    Post subject: Reply with quote
Sparks! wrote:
Don't touch it! Keep it for when you're ready to buy a house else you'll regret it... I didnt have any money from parents but I regret not saving for a house earlier on in life.. I'm only 24 I guess so not old but I could have had a house by now if I saved a bit and regret it now! Get a job and work hard and leave the savings bond for when you want a house deposit Wink


A 'bike now is more important than a house in 6 years Wink
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Sparks!
Sir Tart-a-lot



Joined: 30 Aug 2003
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PostPosted: 01:15 - 21 Feb 2010    Post subject: Reply with quote
ms51ves3 wrote:
Sparks! wrote:
Don't touch it! Keep it for when you're ready to buy a house else you'll regret it... I didnt have any money from parents but I regret not saving for a house earlier on in life.. I'm only 24 I guess so not old but I could have had a house by now if I saved a bit and regret it now! Get a job and work hard and leave the savings bond for when you want a house deposit Wink


A 'bike now is more important than a house in 6 years Wink


I thought like that, a few years back when I didn't want a house..! now I want a house and wish I saved a bit back then! Not everything mind... important to have a bike Mr. Green
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Itchy
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PostPosted: 02:23 - 21 Feb 2010    Post subject: Reply with quote
Sparks! wrote:
Don't touch it! Keep it for when you're ready to buy a house else you'll regret it... I didnt have any money from parents but I regret not saving for a house earlier on in life.. I'm only 24 I guess so not old but I could have had a house by now if I saved a bit and regret it now! Get a job and work hard and leave the savings bond for when you want a house deposit Wink


Not quite!, in that you are looking at it from a nominal point of view, what you should be looking at it a purchasing power point of view.

In that the problem with savings is inflation, in that the government last year went and printed 200bn direct inflation. This reduced the purchasing power of the £ in your pocket by about 7.2%.

Inflation officially is 3.5% in reality its closer to 10%, meaning your £1000 in one year will only buy £900s worth of goods in todays money using straight forward discounted cash flows.

As your dad about it and how much a pint of beer, a loaf of bread and how much he was paid when he was your age now.
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Leviathan91 This post is not being displayed because the poster has bad karma. Unhide this post / all posts.

Ste
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Joined: 01 Sep 2002
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PostPosted: 03:00 - 21 Feb 2010    Post subject: Reply with quote
That sounds like a child trust fund.

There isn't much point in putting too much thought into what you want to do until you know for sure what type of savings/investment account it is as that is the key factor in what you can and can't do as well as what the advantages/disadvantages are.
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Phoenix
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Joined: 01 Aug 2002
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PostPosted: 04:23 - 21 Feb 2010    Post subject: Reply with quote
Itchy wrote:
In that the problem with savings is inflation, in that the government last year went and printed 200bn direct inflation. This reduced the purchasing power of the £ in your pocket by about 7.2%.

Inflation officially is 3.5% in reality its closer to 10%, meaning your £1000 in one year will only buy £900s worth of goods in todays money using straight forward discounted cash flows.


Depends what you're saving the money for though doesn't it, if it's for general living expenses such as saving some to get by in your retirement then yes it will probably be going down in value with interest rates as they are at the moment and inflation. If you're saving to kit out your house with furniture and equipment then it's unlikely inflation will reduce the money's value because those items generally come down in price year on year. Saving for a deposit is also not affected by inflation but only house prices which go up and come down.

You need to figure out what you're going to use the money for and then work out if it's best to leave it in or withdraw it. There was a big slump in share values around 2008 and so if your fund hasn't recovered you're better off leaving it in longer otherwise you may take an overall loss if you cash them in now, all depends what sort of investment this is. Either way i'd say your parents know best as they've been wise enough to make an investment for you, not many do.
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Kickstart
The Oracle



Joined: 04 Feb 2002
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PostPosted: 12:01 - 21 Feb 2010    Post subject: Reply with quote
Leviathan91 wrote:
To be honest I doubt they will even remember what type of account it is. I'm fairly sure it was started when I was born, adding £20 a month into it until now. So if me calculations are correct it's around 4k at the moment, without any interest. I reckon if it stays the full length of time I get £500 lump sum at the end maybe?


Even at 0.1% interest per month you will get about £770 interest. However depending on what the policy is you might get next to nothing (or even lose the capital) if you close it early. You may not even be able to get at the money early.

I would agree with Sparks, etc. Having a newish bike might be nice but is really just a way of throwing money away. Fine if you have the money and can afford to throw it away, but I wouldn't thow away a one off lump sum on it.

All the best

Keith
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The Shaggy D.A.
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PostPosted: 12:07 - 21 Feb 2010    Post subject: Re: Savings Account? Interest after 10/15 years :S Reply with quote
Leviathan91 wrote:
I'm clueless when it comes to accounts and stuff


Good job you've got another two years to learn a bit more about it Smile
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Leviathan91 This post is not being displayed because the poster has bad karma. Unhide this post / all posts.
Old Thread Alert!

The last post was made 16 years, 204 days ago. Instead of replying here, would creating a new thread be more useful?
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