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[MSE Martin]

This discussion relates to the following article Regularly Beat the Best Savings Accounts

To discuss it or ask a question click reply.

(note this article has been updated since the discussion was started, so some of the earlier posts here may be out of date)

This is the place to put your comments or ask your questions

Hi Martin, How to invest a lump sum? I am a bit confused, this is the way i read it. you put £250 in #1 account, after a month you transfer the £250 into #2 account but at the same time there is an other £250 going into #1 account so at all times there will be £250 in #1 account so by the third month there will be £250 in #1 account and £500 in #2 account, there by making interest on both accounts of £1000 interest. Have i got it right or not? ??? Anything to do with banking does my head in. ;D

[MSE Martin]

Noooooo

OK.

Account 1: ING Direct 4.3%
Account 2: Leeds & Holbeck regular saver

You have £2000 to invest

You put £250 in Account 2 and the remainder in account 1

Every month you transfer £250 (max allowable) from account 1 into account 2. The only thing to be careful of is that you must ensure is that once you've nearly spent up the initial lump sum - you keep enough back to make the minimum monthly payments.

Does this make sense

martin

[webmasterpolo]

I have considered the ING and the Leeds and Holbeck accounts - l think the L+H account is the one l would go for as the withdraw limit does not bother me.

My gf and l are going to start saving for a car next month - £300 per month between us. !I want to find the best place to put the money. !I currently have an ISA with about £3250 in it. !I think it's currently only paying 3.64% tax free. !

Questions l have are:

1) !Would l benefit from transferring the ISA money into the ING account and save monthly into the ING account while transferring into the L+H account as suggested to Ernst?

2) !Should l just save into the ISA and build on what l have there instead of opening a L+H account at all?

3) !Would it be best if l kept the ISA (but moved it to a higher interest one) and opened a L+H account for the monthly savings?

Please let me know you wonderful group of money saving gurus.

[MSE Martin]

I am assuming you are both tax payers - in which case a cash ISA for safe savings is the first place to put your money - as 4.2% (best paying instant access ISA) is a lot better than a taxed 5%.

So push as much as you c an in this years cash ISA (is your £3k in this years or last years) and the rest into Leeds & Hoblbeck.

As a note - read my cash ISA article and it explains how you can transfer your existing cash ISA to a new provider that pays more

Martin

[webmasterpolo]

Excellent - thanks for replying so quickly Martin.

I have not used this years £3000 allowance yet - so l will take full advantage of that.

I think l read that ISA article a while ago - l'll go and refesh my memory and make the tranfer asap.

I WILL be buying your book! ! ;D

(and recommending it to everyone) !

[1jacks64]

I have an Abbey National e-saver account which I have had now for 7 months. I think I am right in saying that I now longer receive the special bonus that people get if they have had the account for less than 6 months.

Is there anywhere else that pays a higher gross interest rate than one I am getting now? I am particulalrly interest in ISA's but also savings accounts.

[laminki]

check out the best buys section of this website (or any Sunday newspaper)

[alared]

A good website for daily savings rates and best buys is www.moneyfacts.co.uk
Best hold fire until early August though when most providers are expected to lower their interest rates.

How to invest a lump sum?

One final tip, to invest a lump sum using these schemes, put the money first in a standard savings account. Then set up monthly payments from it to the Regular Savings Account,

How do you set up monthly payments from a savings account (such as ING) to the Regular Savings Account. Saving acounts don't normally provide for bankers orders.

[laminki]

ING do allow this. Refer to the original article. its not flawed or incorrect and is well researched. Martin's not been wrong so far

[jo_knight]

If you want to save more in Regular Savings then Supersaver with Norwich & Peterborough www.npbs.co.uk will take £1000 a month and after 9 months when you have £10,000 in the account the tiered interest will rise to 4.80% from fc4mkvtqj

[Dunspendin]

In the Regular Saver article it is stated that the Leeds and Holbeck account has a maximum monthly deposit of £250. This isn't strictly true - if you opened the account a little while ago (approx 1 year - sorry I can't be more precise), you can up the deposits to a max of £500. The T's & C's were changed to reduce the max a year or so ago. If your a/c predates the change you can get the higher deposit - you may need to haggle a little but it is worth the effort!

Hello,
The problem, (the way I see it) with regular savings accounts is that if after saving for a year one wants to transfer to a different regular savings account, one cannot move the lump sum. Is that correct?
If it is, this means that you are either stuck with a potentially lower rate, or have to start building your whole amount from scratch - a situation which can be made worse if one say, has 5 years worth of savings in a regular savings account. -- ??

Ive just read the article on Derbyshire BS's 5% account. If I open an account today and deposit at least £10 per month will I receive the bonus rate on 31/07/04 or not until 31/07/05?

[murphydavid]

Hi
I just did some sums
Derbyshire Building Society -
If you put £5500 in their savings account which is at 3.45% and £500 in the regular savers at 5% this being the start point for a lump sum of say £12000 then make a standing payment transfer of maximum £500 a month. Then after a year (not including tax) you would have £6262.13 (However if you put the whole £6000 in Ingdirect at 4.3% after a year you would have £6263.12. So you are down £1). After 14 months you break even at £12350 having put in another £6000 to each (to keep it going) after 24 months the Derbyshire would be £43 ahead at £12843.34 against £12800.90 in ingdirect
So if you have a lump sum and take the Derbyshire !option you need to keep it there for at least 14 months and
The Derbyshire needs to remain consistant for that period.
As I did the math I though I would share it with you.

DM

Re the Derbyshire's Regular Savings Account, what you will NOT find in any of their small print is the maximum amount of money you can open this account with - the figure is £1,000. Having tried to open an account with them on 13 Jan 2004 in Birmingham I found it advantageous to have done some homework in advance. The counter staff know surprisingly little, and assume potential customers are telepathic and can guess at such things as the maximum amount of money that can be used to open an account.

[murphydavid]

Derbyshire's REGULAR Savings Account is the one you add regular deposites to each month. According to their web site it allows a maximum regular monthly deposite of £500.00 and a minimum of £10 so you should be able to open it with £10. But you need to have £10.00 a month to add to it from then on.

Ref
http://www.thederbyshire.co.uk/savi/...at_regsav.html

DM

[MSE Martin]

I've just noticed this - the Derb BS account has a minimum opening balance of £10/month

martin

[aagoren]

Martin,
In your artile you wrote that the rate for Leeds & Holbeck BS regular saving is 5.0%, i've heked in their site and it is only 4.6%. did I miss something?
another question is regarding the bonus from Derb BS. as they pay the interest on July, if I open the aount now, will i get 5.0%? or only next year?

I also spoke with Derb BS customer service and told the maximum opening balance is £500.