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Credit Union or Post Office for savings?

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  • 08-08-2015 12:42am
    #1
    Bananaleaf
    Registered Users Posts: 2,921 ✭✭✭


    Hi

    Searched for similar threads and couldn't find one.

    I'm just wondering which of the above two places would be better for saving. I'm looking to know the following:

    1. Which has the highest interest rate? (I know neither is great)
    2. When looking for a mortgage is it better to have the money in one place over the other - does that matter to the banks?
    3. Is it better or pointless to divide money between the two?

    Not interested in investing or freezing money to get higher interest rates - don't want to lock the money in incase the right house or something unexpected comes along. So I don't really think I need a financial advisor.

    I'm not talking millions, in the region of about 20-30k

    I will be asking the bank, P.O and C.U from Monday but would also like some impartial advice.


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    #2
    Geuze
    Registered Users Posts: 13,105 ✭✭✭✭Geuze


    Very little difference in rates.


    What a mortgage lender wants to see is evidence of consistent regular saving.

    So they want to see regular amounts leaving bank account going to savings.


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    #3
    Bananaleaf
    Registered Users Posts: 2,921 ✭✭✭Bananaleaf


    Geuze wrote: »
    Very little difference in rates.


    What a mortgage lender wants to see is evidence of consistent regular saving.

    So they want to see regular amounts leaving bank account going to savings.

    Yeah I was thinking that it wouldn't matter where it was re: mortgage application. And pretty much had a feeling that rates were more or less the same too - which are dismal from what I can make out - but hey thats the price I pay for not being willing to invest!

    I know this is probably a question for the banks, but didn't really want to go near a mortgage advisor until we have a respectable amount in the bank ... But just wondering re: the regular, consistent saving. What I currently do at the moment is budget month to month and have a set amount I would transfer across each month to CU. When I get to the end of the month, anything left over that I managed not to spend also goes over and I start the next month afresh. However, my partner tends to just let their funds accumulate over the year in their personal account in the bank, then at the end of the financial year transfers a lump sum.

    While I admire their self discipline (for me the money needs to be elsewhere so I don't feel super rich and spend it all) I never really thought this was the best way of doing it as I would have thought, despite how poor the interest rate in CU is, it is better than a bank. But I am also now wondering if this would be considered by lenders as 'consistent, regular saving' or a little more erratic than month to month.

    Hope that makes sense
    Thanks


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    #4
    Geuze
    Registered Users Posts: 13,105 ✭✭✭✭Geuze


    Bananaleaf wrote: »
    I know this is probably a question for the banks, but didn't really want to go near a mortgage advisor until we have a respectable amount in the bank ... But just wondering re: the regular, consistent saving. What I currently do at the moment is budget month to month and have a set amount I would transfer across each month to CU. When I get to the end of the month, anything left over that I managed not to spend also goes over and I start the next month afresh.

    THIS IS WHAT THE MORTGAGE LENDER WANTS TO SEE


    However, my partner tends to just let their funds accumulate over the year in their personal account in the bank, then at the end of the financial year transfers a lump sum.

    Not as good as first way of saving, even if amount saved is the same


    While I admire their self discipline (for me the money needs to be elsewhere so I don't feel super rich and spend it all) I never really thought this was the best way of doing it as I would have thought, despite how poor the interest rate in CU is, it is better than a bank. But I am also now wondering if this would be considered by lenders as 'consistent, regular saving' or a little more erratic than month to month.


    Mortgage lender wants to see monthly, regular, consistent saving.

    Sensible, disciplined savers = good borrowers, low risk


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    #5
    Bananaleaf
    Registered Users Posts: 2,921 ✭✭✭Bananaleaf


    Thank you, this has given me good advice. We will both start doing it that way then and when the time is right we will be more ready to apply.

    Thanks


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