For anyone who hasn’t come across it in the UK its worth mentioning the help to buy ISA which is a government scheme started in December 2015 (and will end for new accounts in November 2019)
At that time there was a lot of news about first time buyers struggling to get a deposit big enough to buy their first house and this is one of the governments solutions.
for every £100 you save in this ISA the government will add £25 as long as you use it for a deposit on a house. Looking at it simply it seems like a no brainer, where else are you going to be able to get a government backed 25% on your money? On top of that because its an ISA the bank you have opened the account with will give you tax-free interest on the money. The rates vary but you can expect around 2-3%
There are limits to how much you can save. Your first deposit can be a lump sum of £1200. After that there is a maximum deposit of £200 a month and the scheme itself has a cap of £12,000.
If you do manage to save the full £12,000 the government will add its 25% which comes to a nice £3000 tax-free! The scheme is also one per person instead of one per household. So if you and your partner are both saving you can turn £24,000 into £30,000. Using a rule of 20% deposit that would allow you to purchase a house worth £150,000.
Obviously this scheme depends on you being able to set aside £200 each month for 3 years and wanting to buy a house at the end of it. But if that matches your criteria then I think most people would struggle to beat the 25% (+2-3% interest) they’ll be able to earn risk-free and tax-free on this.
Here’s the official government page on the scheme for those who want to learn more: Government Help to buy Isa