24-year saver

By THIS IS MONEY
Updated:

 

IWOULD like to save £800 a month for 24 years. Every 12 months I would like to be able to withdraw all funds (including interest), in cash. What do you suggest? MB, ABERDEEN

Darius McDermott at independent financial advisers Chelsea Financial Services says: Unfortunately you have few options. The best no-risk savings vehicles are bank or building society accounts.

Consider the Abbey National eSaver internet account offering 4.25% interest on lump sums of £500 and over. Or, if you don't mind a notice period, Safeway pays 4.3% on lump sums of £500 or more. You must give 60 days' notice by post and you can do six notice withdrawals a year of a minimum of £500.

You could put up to £3,000 per tax year as a lump sum or monthly payments in a mini cash Isa and get tax-free interest. You can withdraw the money at any time. You might consider Safeway's mini cash Isa offering 4.5% with instant access and annually-paid interest.

One other option would be a one-year building society bond, but interest on this type of bond is so poor that a standard internet account seems the best option.

If you are willing to leave your cash invested long-term and take a bit of risk, consider an equities Isa or unit trust/Oeic. You can get instant access but it's not advisable to cash in on an annual basis - equity investment should be long-term.

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