What is my best option for saving weekly for home down payment to get best return on investment.?

I will be recieving a substantial raise (due to job promotion) in a few weeks and will be able to put back somewhere between $100-$200 per month (depending on other necessities) and possibly sometimes more. I am wanting to build up some money for a down payment on a home This could be as little as a year but hopefully no more than 3 years. I realize that it won't be a huge chunk of money, but it will be more than the NOTHING we have saved now.

Can someone give me some tips on the best way to go about this, please?

I am really leaning toward a standard savings account through my bank because I can direct deposit a specified amount automatically from my check, thus preventing the "I forgot" or "I'll double up next time" syndrome. (I know I will.)

Or should I buckle down and get into something more aggressive. (Note, I don't have anything to start with, except maybe the intial $200 give or take.)

I would prefer not to get into stock.

I don't know if this is the BEST answer, but it is somethign to consider...
What kind of interest rate do they have for a regular savings account at your bank? It might be worth it to shop around to see if there is anohter bank or credit union that has better interest rates. If you want to keep with the same bank, see if your employer will divide the direct deposit between two banks.

Right now I am considering ING -- they have an "orange" savings plan with no minimum and it is 4.5%. They say it can even link to your current bank account. That interest rate is better than my credit unions CD rates, and I can have access to the money without worrying about timing like I would with a CD. I still want to check on it some more before I do this.

Anyway, just a thought.

You're initial decision on the cash account is the most prudent decision although you should consider alternatives to savings accounts such as a money market fund and or short term cd's (6-12 months or less) in order to increase your yield...Some bank's offer cds that you can add to so consult with your local banker. Your time horizon is too short to invest in any other options such as stocks or mutual funds and by doing so there is a good chance that your principal will be less than what you invested when you need access to the funds. The most important factors in short term savings should be keeping it as conveneint and hassle free as possible to ensure you actually do it and keeping it as risk free and liquid as possible to ensure preservation of capital and the ability to access it when needed.

Being that you are talking short-term saving - less than five years, I would agree that opening an ING saving account is probably best. The interest rate is 3 to 4 times higher than most local banks. Here are some financial guides that might help you find some additional ways to save money: http://www.findlocalinsurance.com/librar...