Saving for regular big bills with Natwest e-savings?

nicki_2

New Year = New start with my finances and I figure its about time I got a savings account.

I'm with the Natwest for my current account and the set up I have (bills all going out on Direct Debit and keeping track through online banking AND Microsoft Money) it great as it is BUT when it comes to April and MOT/Car Tax and then again in November for Car Insurance I'm always stretching the money and usually end up paying for the insurance on the credit card. I'm sick of this as I still haven't paid off November 2004's insurance costs and had to put November 2005's on it as well! I'm looking to set up a savings account that I can "feed" monthly (based on the yearly figures divided by 12 and then rounded up to the nearest £5) so there will be no more major shocks to my account!

My problem is that I am putting ALL my spare money currently into paying off debts (credit card debts nearly £3000 ~ £2000 on a 0% in my partners name with minimum payments) and paying off a £5000 bank loan, plus rent due to go up by approximately £40 a month in June, Tax Credits to go down by £20 a week in April, and a £1000 tax shortfall which will start to be paid back in April as well, I need to be able to get instant access to the savings if needed (with a soon-to-be-five-year-old unexpected expenses like new shoes/clothes or uniform due to a growth spurt etc are getting more and more regular!).

I was thinking of going for an e-savings account with Natwest so that I can transfer money easily between my accounts and see at a glance what my balance is when I check my current account online. I know that there are other online banks/savings which probably do better rates, but I figured that if I am going to be using the account more as a piggy-bank than a proper savings account, then it wouldn't matter so much. Can anyone suggest a better option or at least reassure me that my idea is at least plausible?

crossleydd42

The great advantage of having the NatWest e-savings account is that transferring money between the two accounts would probably be either instant or happen the next working day - with another bank it would take three working days. Also, you could probably open the account online without having to provide any paperwork, since you already have yr account there. Go for it!

al_yrpal

I have got a NATWEST account that I have had since 1966, but I also have a Nationwide one which also has e-savings. The Nationwide e account gives 4.75% at present, much better than NATWEST, and if you pay more than £1k a month in it gives you 3% on the current account as well. To top it, you also have the debit card with which you can withdraw cash abroad absolutely fee free, unlike the Natwest one which makes swingeing charges. Transfers of cash between current and e-savings in the Nationwide accpunt is absolutely instant, even at weekends, public holidays etc. The only fault is that you have to do it live, you can't set up a future transfer like you can with Natwest.
I would wholeheartedly recommend Nationwide.

mister_t

This is my set up, which may give you some ideas.

I have two current accounts one where my sallery goes into and one where all my direct debits go out from. I have worked the total cost of all my regular bills including anual things like car tax, insurance etc. to get a monthly figure, £X. I then have a standing order that moves £X from my sallery account into my bills account just after my sallery comes in. If payments are variable like a mobile bill just look at the average of the last 6 months and add a bit for comfort.

The main benefit of this is that the bills money is out of the way so you know that whatever money is in your sallery account you can spend without worrying that you won't be able to pay a bill. You can run it to zero at the end of the month and be OK. To make this work you have msut dip into or borrow from the bills account for other things.

The bills acount will obviously grow over time as some payments are annual. Periodically I move some money out of the bills account into a savings account that is used only as a float for the bills account. If I need the money back in there to pay a big bill I just put the big bill on credit card and move the required money back. All done online and it only takes a few working days to move the money.

This system works very well for me and there is never a shock when I have to pay a big bill. For the current accounts move to a bank that give you a decent interest rate like lloyds or A&L (~4%). I have ust moved from NatWest for this reason. For the bills acount float use an instant access savings account that gives a good rate like ING or firstDirect. Keep any other long term savings else where.

You can never have too many accounts.