The Home Owner's Alternative To ISAs
There are many ways to save, but homeowners should consider not saving at all! Read why.
As a financial writer for The Fool I get asked lots of questions, like "What's going to happen to house prices?" "What shares should I buy now?" "Were you wearing trousers when you posed for the above cartoon?" and "Are you always this evasive?"Another question I get asked is: "Where should I put my savings?" Thing is, savers have a lot of options. It's tempting to answer that question in the same way I answer the question "What shares should I buy now?" which is "Oh, it's all good!"* However, it depends on your circumstances.Generally, I avoid most bonds like the plague and complex savings products are out too. Simple, instant access (or at least quite quick access) Cash ISAs and instant access savings accounts are my bag; you can get good interest rates whilst your money stays where you can reach it quickly.Cash ISAs and savings accounts are the obvious answer for most Fools, but sometimes the question "Should I overpay on my mortgage instead?" comes up. I was recently reminded of this by Fool rk05 on the discussion boards.Even with regular mortgages, you are often able to overpay, and also to take some of that money back out again. The advantage of mortgage overpayments over an ISA is that you don't have to worry about ISA limits. If you 'withdraw' £3,000, you can still pay it back in within the same year.Still, if you regularly remortgage to keep the top deals, you'll probably do better to save using one of the very best cash ISAs, because at present the top ISA rates are higher than the best mortgage rates. But, after filling your ISA for the year, consider overpaying your mortgage rather than paying into a savings account. However you save, ensure that some money is readily accessible for emergencies.Make sure your mortgage terms and conditions don't penalise you for overpaying and, if you think you may need the money in future, make sure it allows you to get the cash back. Also, before you consider mortgage overpayments, pay off your more expensive debts such as credit cards and loans (i.e. the ones with higher interest rates). You'll save even more money that way!*I answer the house-prices question with a shrug, and the trousers question with a wink and a roguish grin. For more on investing in 'it all', see What Is An Index Tracker?> Ask your own questions! Want to discuss house prices, learn the best places to buy beer, or to discuss other ways to save? You'll find some helpful Fools on one of our many categorised discussion boards.> Compare mortgages through The Motley Fool's award-winning mortgage service.