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  • FIRST POST
    • cracker_jack
    • By cracker_jack 20th Apr 17, 12:58 PM
    • 26Posts
    • 48Thanks
    cracker_jack
    Bank juggling, best way to earn interest?
    • #1
    • 20th Apr 17, 12:58 PM
    Bank juggling, best way to earn interest? 20th Apr 17 at 12:58 PM
    Say for example I have £8,000 to invest.

    At the moment £3,000 in NS&I 3 year fixed at 2.2% and £5,000 in OakNorth Bank 3 year fixed at 1.91%.

    Will give me £198 (NSI) + £286.50 (OakNorth) = £484.50 after 3 years.

    I want to invest the money in a completely risk free way, so no stocks and shares etc.

    I'm intrigued by these juggling techniques many of you indulge in and was curious to know how I go about it, most of it appears Klingon to me. Can any of you fellow moneysavers provide me with a few simple steps on how I could start my juggling act and what kind of returns could I be looking at?
Page 1
    • AlanP
    • By AlanP 20th Apr 17, 1:13 PM
    • 954 Posts
    • 671 Thanks
    AlanP
    • #2
    • 20th Apr 17, 1:13 PM
    • #2
    • 20th Apr 17, 1:13 PM
    You can get a minimum of 3% on that amount of money and probaley closer to 4 or 5%.

    TSB, Tesco & Nationwide Flexclusive (for 1 year) to start with in terms of current accounts, and add a Nationwide Regular Saver alongside to boost the return.

    If you achieved 4% pa on the whole £8k then that would be £320 per year or £960 over 3 years.

    Each account has its own Ts&Cs but fairly straightforward. The main one is typically paying a minimum amount in each month (say £1k) but this can be sent on to the next account in the chain straight after it has been paid in, it does not have to stay there.

    Have a look on main MSE site for articles on best Current Accounts and Regular Savers.
    • EachPenny
    • By EachPenny 20th Apr 17, 1:38 PM
    • 2,838 Posts
    • 5,077 Thanks
    EachPenny
    • #3
    • 20th Apr 17, 1:38 PM
    • #3
    • 20th Apr 17, 1:38 PM
    Can any of you fellow moneysavers provide me with a few simple steps on how I could start my juggling act and what kind of returns could I be looking at?
    Originally posted by cracker_jack
    Start with the number of regular monthly direct debits you already have, and how much work you are prepared to put in to increase that number and also to maintain the accounts you set up.

    That is key to working out which accounts to pick as most have a minimum number of active/paying out direct debits in order to qualify for the higher rates of interest. There are ways of increasing the number of DD's you have, but if you aren't willing to do that (many people aren't) then you may need to concentrate on the accounts which pay a lower rate of interest, but on a higher amount per account.

    Also, there's nothing wrong with starting small (one or two accounts) and then building the number up as you get used to the juggling act.
    • eskbanker
    • By eskbanker 20th Apr 17, 1:45 PM
    • 5,786 Posts
    • 5,670 Thanks
    eskbanker
    • #4
    • 20th Apr 17, 1:45 PM
    • #4
    • 20th Apr 17, 1:45 PM
    Say for example I have £8,000 to invest.

    At the moment £3,000 in NS&I 3 year fixed at 2.2% and £5,000 in OakNorth Bank 3 year fixed at 1.91%.

    Will give me £198 (NSI) + £286.50 (OakNorth) = £484.50 after 3 years.

    I want to invest the money in a completely risk free way, so no stocks and shares etc.
    Originally posted by cracker_jack
    Unfortunately there's no such thing as completely risk-free - by putting the money into savings you don't eliminate inflation risk. If inflation continues at the current 2.3% over that same three year period, you'd need to have £8,565 to preserve the spending power of your starting £8K, so by using the accounts you suggest you're already losing some of the value of your pot.

    Better savings/current/regular saver accounts would help address this but don't be too heavily influenced by the over-simplistic notion that saving is risk-free and investment is risky....
    • teddysmum
    • By teddysmum 20th Apr 17, 3:12 PM
    • 8,511 Posts
    • 5,041 Thanks
    teddysmum
    • #5
    • 20th Apr 17, 3:12 PM
    • #5
    • 20th Apr 17, 3:12 PM

    Better savings/current/regular saver accounts would help address this but don't be too heavily influenced by the over-simplistic notion that saving is risk-free and investment is risky....
    Originally posted by eskbanker

    To most savers (as opposed to 'serious' investors) the risk reference is to the possibility of losing some of the original capital rather than the spending power of their money.
    • eskbanker
    • By eskbanker 20th Apr 17, 3:31 PM
    • 5,786 Posts
    • 5,670 Thanks
    eskbanker
    • #6
    • 20th Apr 17, 3:31 PM
    • #6
    • 20th Apr 17, 3:31 PM
    To most savers (as opposed to 'serious' investors) the risk reference is to the possibility of losing some of the original capital rather than the spending power of their money.
    Originally posted by teddysmum
    Yes, I agree that that's a fairly widespread perception but am just pointing out that careless use of a meaningless phrase like 'risk-free' is misleading in that capital loss is only one of many different types of risk, so mitigating that one in particular shouldn't be seen as the be all and end all!
    • Jo Blogs
    • By Jo Blogs 20th Apr 17, 3:32 PM
    • 751 Posts
    • 2,594 Thanks
    Jo Blogs
    • #7
    • 20th Apr 17, 3:32 PM
    • #7
    • 20th Apr 17, 3:32 PM
    To most savers (as opposed to 'serious' investors) the risk reference is to the possibility of losing some of the original capital rather than the spending power of their money.
    Originally posted by teddysmum
    To most 'serious' savers, it is both the risk reference and spending power of their money
    Saved Nitty Gritty £7440.75 [149%] / £5000-[Sep] £58.44 for the 'Save 12k in 2017' #157
    2017 Womble #35 £3463.27 Sept NSDs 4/15CCCChl 9/12 months
    Sept PPChl#002 Pts 71
    • cracker_jack
    • By cracker_jack 20th Apr 17, 5:29 PM
    • 26 Posts
    • 48 Thanks
    cracker_jack
    • #8
    • 20th Apr 17, 5:29 PM
    • #8
    • 20th Apr 17, 5:29 PM
    To most savers (as opposed to 'serious' investors) the risk reference is to the possibility of losing some of the original capital rather than the spending power of their money.
    Originally posted by teddysmum
    Yes, that was exactly what I was referring to in regards to risk free.

    I actually invested in a Stock and Shares ISA a few years ago and after a year it was less than what I originally put in so I won't be touching those ever again.

    This account juggling venture looks like it's a lot more complicated than I was expecting but the return looks pretty impressive.
    • EachPenny
    • By EachPenny 20th Apr 17, 6:10 PM
    • 2,838 Posts
    • 5,077 Thanks
    EachPenny
    • #9
    • 20th Apr 17, 6:10 PM
    • #9
    • 20th Apr 17, 6:10 PM
    This account juggling venture looks like it's a lot more complicated than I was expecting...
    Originally posted by cracker_jack
    It is only as complicated as you want to make it. You can start with up to £20k at 1.5% (give or take) with one Santander 123 account. Two different accounts and a couple of standing orders can give you more.

    About a dozen current accounts and maybe 18 regular savers and you're probably reaching the limit of benefits compared to just putting anything else you have into top end 'conventional' savings accounts. Done efficiently, running 30 or so accounts should take no more time day-to-day than running just a few.
    • eskbanker
    • By eskbanker 20th Apr 17, 6:44 PM
    • 5,786 Posts
    • 5,670 Thanks
    eskbanker
    I actually invested in a Stock and Shares ISA a few years ago and after a year it was less than what I originally put in so I won't be touching those ever again.
    Originally posted by cracker_jack
    ....which, with all due respect, proves my point about lack of understanding of what risk actually means!

    It's clearly inappropriate to invest in S&S with a mindset that a lower balance after no more than a year is enough reason to crystallise losses (i.e. buying high and selling low), but each to their own. It doesn't make much sense to dismiss the principle because of poor decision-making (or advice perhaps?) though - it's a bit like saying that you're never driving again because you bought a 40-year old Austin Allegro and it kept breaking down....
    • Vortigern
    • By Vortigern 20th Apr 17, 6:53 PM
    • 2,308 Posts
    • 1,513 Thanks
    Vortigern
    At the moment £3,000 in NS&I 3 year fixed at 2.2% and £5,000 in OakNorth Bank 3 year fixed at 1.91%.
    Originally posted by cracker_jack
    When do these 3-year fixed terms end?

    Can you get your cash out before that?
    - and if so, what is the penalty for early withdrawal?

    Have you any other spare cash?
    - and how much can you save each month?
    • TheShape
    • By TheShape 20th Apr 17, 6:54 PM
    • 1,108 Posts
    • 862 Thanks
    TheShape
    I actually invested in a Stock and Shares ISA a few years ago and after a year it was less than what I originally put in so I won't be touching those ever again.
    Originally posted by cracker_jack
    But what is it (would it be) worth now? Stocks and Shares are a long-term investment so their value within a year of investment should be of little concern.

    The best thing to do with high(er) interest current accounts and regular savers would be to concentrate on the highest paying accounts first and preferably take advantage of the odd switching incentive along the way. By doing that you can get the best return possible as soon as possible.

    The FlexDirect/Flexclusive regular saver combo at Nationwide is a great place to start especially if you can get a £100 switching incentive by being referred to them. The First Direct regular saver account is also an excellent account to get early on with a potential £100 available for switching an account to them.
    • cracker_jack
    • By cracker_jack 20th Apr 17, 6:57 PM
    • 26 Posts
    • 48 Thanks
    cracker_jack
    It is only as complicated as you want to make it. You can start with up to £20k at 1.5% (give or take) with one Santander 123 account. Two different accounts and a couple of standing orders can give you more.

    About a dozen current accounts and maybe 18 regular savers and you're probably reaching the limit of benefits compared to just putting anything else you have into top end 'conventional' savings accounts. Done efficiently, running 30 or so accounts should take no more time day-to-day than running just a few.
    Originally posted by EachPenny
    I'll certainly look into it more, I'm guessing once I get the knack of it, it can be quite rewarding. Got to be better than the peanuts I'm currently earning.
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