What type of account please

GAILEY

Hi, I hope that someone on this forum can help - My OH was made redundant and we are opening various accounts to use the money - Isa's, regular savers etc and are also overpaying on the mortgage (we are not paying off a lump sum as there is a heavy penalty for that).
I have a position whereby regular amounts are to be drip fed by, I think, direct debit, into our current accounts to go to the savings accounts, BS etc - but what type of account do I need to put the lump sum in ??
I have allocated money that we won't need for a year or so and put that in a savings account - but I now need to find an account to put the rest in ( a years worth of overpayments, regular savings amounts etc) - is there any account other than a current account that I could use to do this which would allow those amounts to come out but allow interest to be paid at a better level??
Any thoughts would be warmly welcomed - as I am finding it's a bit of a maze

G_M

The trouble with savings accounts is that they generally don't allow direct debit or standing orders, so you'll need to manually 'feed' your current account each month to then drip feed your mortgage/regular savers etc by direct debit.

So - either remember to transfer a suitable lump sum each month from the best paying savings account you can find (see here or here) or
Use an interest-paying current account to hold the whole lot eg coventry 1st (1.59% with no upper limit on balance). However you'll need to fund it with £1K per month. Maybe if you already have a current account you could just move £1K in and then out to meet this requirement. You could set up 2 standing orders between the 2 current accounts to do this.

Baldur

Certain Abbey and Alliance & Leicester current accounts will pay you 5% on balances of up to £2,500 for a year and have the usual Direct Debt/Standing Order facilities - http://www.moneysavingexpert.com/banking/compare-best-bank-accounts#credit

Both have minimum monthly funding requirements, as per G_M's reference to the Coventry account above.