Savings Advice for my Millions..

13

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  • TheShape
    TheShape Posts: 1,777
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    A switch to TSB would be the option I'd take for now. Getting Switching bonuses is a nice quick way of building a bigger pot of cash. I also use the debit card for £100 of spending each month to get the £5 monthly cashback that they previously offered. The current £5 reward for the Direct Debits is a good bonus.

    I opened one extra Flex account with Nationwide and switched it (can't remember where to), but decided against another switch too quickly. An RBS account was straightforward to set up as a sacrificial account for switching.
  • TheShape wrote: »
    A switch to TSB would be the option I'd take for now. Getting Switching bonuses is a nice quick way of building a bigger pot of cash. I also use the debit card for £100 of spending each month to get the £5 monthly cashback that they previously offered. The current £5 reward for the Direct Debits is a good bonus.

    I opened one extra Flex account with Nationwide and switched it (can't remember where to), but decided against another switch too quickly. An RBS account was straightforward to set up as a sacrificial account for switching.

    I only opened a Flexiaccount about three months back and switched it last month to FD.

    I suppose I may be best opening an RBS account then and once open, switching to TSB? Do you think this would work?

    I've already got a Mortgage and don't require any credit cards etc so not overly concerned about opening accounts too soon? I don't even need overdraft...
  • TheShape
    TheShape Posts: 1,777
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    I suppose I may be best opening an RBS account then and once open, switching to TSB? Do you think this would work?

    I've already got a Mortgage and don't require any credit cards etc so not overly concerned about opening accounts too soon? I don't even need overdraft...

    Don't see why it wouldn't work, you just need to ensure you meet the criteria for the switching incentive and/or any requirements to receive interest, cashback for Direct Debits etc. Have a good read of the t&cs.

    Opening lots of current accounts hasn't prevented me from getting Credit Cards. There is no need to apply for overdrafts with your new current accounts if you only intend to use them like savings accounts. I wouldn't open lots of current accounts if I was likely to apply for a mortgage soon but like yourself I already have one.
  • Well, I opened a RBS account as a sacrificial account and the TSB account.

    I'll move that across and hopefully get the £130 switching bonus. As for active direct debits for the £5 a month I believe they have to actually pay out per month? I guess I will just setup £1 to Health Lottery and £2 to normal lottery. Free lottery tickets, right? Leaves £2 which I may as well use to make the Lottery two draws a month?

    Thanks for the guidance all! Appreciated:j
  • atush
    atush Posts: 18,719
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    Mortgage overpayments will be next approach once £10k built up. Currently owe £66k at a rate if 2.09%

    Again, i'd look at a pension instead. You should do better than 2.09%
  • I have a pension at the moment.

    It has the grand total of £6k in there! Impressive hey?! :p

    I quite like the thought of having no mortgage, so overpaying that was quite appealing. I would then focus on a pension once this was paid off.

    I have a work pension (stakeholder, group) as far as I know it isn't nest nor now pensions. Would work contribute to my own pension should I have one elsewhere? The work one is with Friends Provident(Aviva now I guess?)

    Thanks
  • jimjames
    jimjames Posts: 17,532
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    edited 23 June 2017 at 5:36PM
    I quite like the thought of having no mortgage, so overpaying that was quite appealing. I would then focus on a pension once this was paid off.

    It might "feel" nice but problem is the differential in rates vs returns. Over the long term, like a mortgage term, you're losing a big chunk of money by paying off mortgage rather than investing.

    Assuming 3% mortgage and 7% investment return, after 10 years you'd be 25% better off if you'd invested in pension rather than paid off mortgage
    Remember the saying: if it looks too good to be true it almost certainly is.
  • Interesting!

    So where would you suggest I invest?
  • If I have £500pm going into flexclusive saver @5pc

    £300pm going into FD Saver at 5pc

    £2500 in flexdirect @5pc

    And I only have £100pm remaining to spare.. there isn't anyway I can max this more is there? If I have a tsb account.. ideally need £1500 lump sum to get 3pc else what I save isn't going to be much in interest I calculate?
  • TheShape
    TheShape Posts: 1,777
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    Don't worry too much about the total amount of interest you're earning (you can't earn interest on money you don't have) but do try to earn the best rate on what you have to save.

    If you're prepared to put a bit of work into managing multiple accounts you could try doing what I found has worked well to maximise my savings:

    - Get as many switching bonuses as you can. Getting perhaps £500 or more for switching a few accounts is a big boost to your savings pot. You can then start earning interest on that money. Keep the accounts that have decent perks such as paying interest, regular savers, reward payments etc.

    - Make use of the best paying accounts that you can open. The 5% regular savers are especially worth getting as well as the 3% accounts such as TSB. Don't worry too much if you can't immediately fill an account, just earn as much interest as you can on what you have.

    - Plan ahead for rate changes or regular savers maturing so you don't end up with money not earning interest.
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