Savings advice needed

2

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  • Yes standing orders between the two do work - you don't even have to leave the couple of days between (and probably shouldn't as you get no interest on the balance over £5k)
  • System
    System Posts: 178,077
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    So, If I put £5K in my two Vantage accounts and have a SO to send £1000 from Vantage account 1 to Vantage account 2, and a SO to send £1000 from Vantage account 2 to Vantage account 1, both on, say, 1st of the month, the accounts get the 3% interest and everything ticks along nicely.

    Can anyone spot a flaw in this plan?
  • Zekko
    Zekko Posts: 208 Forumite
    scgf wrote: »
    So, If I put £5K in my two Vantage accounts and have a SO to send £1000 from Vantage account 1 to Vantage account 2, and a SO to send £1000 from Vantage account 2 to Vantage account 1, both on, say, 1st of the month, the accounts get the 3% interest and everything ticks along nicely.

    Can anyone spot a flaw in this plan?

    There is no flaw. I've been doing this the last 2 years! :)
  • nilrem_2
    nilrem_2 Posts: 2,188
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    Gromitt wrote: »
    Just transfer the 1K and straight out again, thats all you need to do. So it will at 6K for about 10 seconds or so.

    You can have 3 such accounts and transfer between them, so apply for another 2, and then transfer from 1->2->3->1. No need to get faster payments involved.

    If you only have 10K to spare, only grab an extra one. If you only have 5K, you can use a savings account I believe.

    Lol Quite amazing what one has to do to get a decent interest rate now! You would think the institutions would realise that folks will do this, if they had any sense they would just say sod it have the one account and you can have the 3% interest! :)
  • badger09
    badger09 Posts: 11,128
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    nilrem wrote: »
    Lol Quite amazing what one has to do to get a decent interest rate now! You would think the institutions would realise that folks will do this, if they had any sense they would just say sod it have the one account and you can have the 3% interest! :)

    Not many folks are actually savvy enough to play the banks at their own game and banks rely on customer ignorance and or inertia.

    This forum (and the main site) are a goldmine of information and most of the posters genuinely want to help others, but in terms of the total population, very few people read it and fewer act on it :(
  • nilrem_2
    nilrem_2 Posts: 2,188
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    badger09 wrote: »
    Not many folks are actually savvy enough to play the banks at their own game and banks rely on customer ignorance and or inertia.

    Suppose so, explains why I have 4 Natwest esaver accounts, have to keep opening a new one to get decent interest!
  • System
    System Posts: 178,077
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    Thanks guys. I have the 30K and am waiting for the cheque to clear. I have set up some future bill payments to pay off my Nationwide Loan, and to pay 2 x £5000 into my Vantage accounts. Now I want to move £5640 to an ISA.

    I am just getting my head around ISAs, but what happens if the interest rate of the chosen ISA falls uncompetitively say a year from now? Is it possible to move the funds to a different organisation without losing out on any interest? I notice some places offer good rates but with a bonus which will be removed after, say, a year or 18 months.
  • Gromitt
    Gromitt Posts: 5,063 Forumite
    scgf wrote: »
    I am just getting my head around ISAs, but what happens if the interest rate of the chosen ISA falls uncompetitively say a year from now?
    You find someone who has a favorable rate and accepts "Transfers in", and then give them the details of the ISA you want to move to them. They'll do it all for you. You can do this as often as you like, plus you can still open a new ISA with someone else and deposit funds in that.
  • System
    System Posts: 178,077
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    Thanks. If I put £5640 into one ISA, I can't open another in the same tax year? Is that right? The next year I can either add to my current ISA - up to whatever the limit is in the next financial year, or start a new ISA with a different organisaton.

    Have I got it right?
  • badger09
    badger09 Posts: 11,128
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    scgf wrote: »
    Thanks. If I put £5640 into one ISA, I can't open another in the same tax year? Is that right? The next year I can either add to my current ISA - up to whatever the limit is in the next financial year, or start a new ISA with a different organisaton.

    Have I got it right?

    Almost right

    You can open as many ISAs as you like in a year, but basically you can only pay 'new money' (£5640 this tax year) into one at a time. Some ISA providers (eg Nationwide) allow you to open more than 1 ISA with them and split your allowance between them.

    It probably won't be a good idea to add to your existing ISA next year as the rate will almost certainly have dropped :(. On 6th April you could open a new one for next year's allowance, and another to transfer this year's £5640 + interest into. Or if you find one with a good rate which accepts transfers, you could just open that, pay new money in and also transfer this year's.

    Very important if you want to transfer, is to ask the new provider to do the transfer for you. Don't do it yourself or you'll lose the tax free status :eek:

    Hope I haven't confused you :o
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