Lloyds TSB Monthly Saver

jyugin

In today's Guardian (Saturday) Martin Lewis indicates the extra interest earned by saving in the Lloyds TSB Monthly Saver account. However, he assumes that you will transfer money by Standing Order from your usual (high-interest) savings account. I don't know of any good savings account that allows a S/O to be set up to pay to external accounts. You have to transfer from your savings account to your 'linked' account (normally a basic bank account), then set up a S/O to transfer from this bank account to the Lloyds savings account - so thare may be up to 6 or 7 days earning no interest while the 2 transfers take place. How badly does this affect the total interest earned?

Chumana

The monthly SO is taken from a LTSB current account, not a savings account. I assume that Martin means that you can feed the monthly saver from the online saver (via your current account) all of which are immediate transfers when done online, therfore not losing any interest at all

jyugin

I think the interest earned figures that Martin shows assumes that money is kept in a high-interest savings account, and transferred from there each month to the Lloyds monthly saver account. Then you are earning interest (say 4.5%) on your money before you transfer it each month to the Lloyds monthly saver.

My point is that to get the money from your savings account to the new Lloyds account, you must perform 2 transfers - 1 to a bank account that allows Standing Orders out of it, and then a S/O from that bank account to the Lloyds monthly saver - this can take 6-7 days.

BTW transferring money online between 2 accounts takes 3-4 working days.

Geoffo_M

3/4 days loss of interest on £250 amounts to about 10p (assuming you are getting around 4.5% at the moment) . This Lloyds 8% account earns you an extra 3.5% and the 10p will be recouped in just over 4 days. And every 4 days will earn you an extra 10p more than the account that your money would have been sitting in.

So well worth doing

Chumana

jyugin wrote:

BTW transferring money online between 2 accounts takes 3-4 working days.

Not with Lloyds it doesn't! I can transfer money between my savings and current accounts online and it is done with immediate effect, and that includes paying my credit card too, payment shows up the very same day on my statement!

Even transfers and bill payments done online to different banks/companies only take 2 days to clear from Lloyds, and not 3-4 days as with most other banks.

Chumana

jyugin wrote:

My point is that to get the money from your savings account to the new Lloyds account, you must perform 2 transfers - 1 to a bank account that allows Standing Orders out of it, and then a S/O from that bank account to the Lloyds monthly saver - this can take 6-7 days.

You need to have/open a Lloyds current account to be able to operate the new monthly saver account anyway, so as I said before the transfers are immediate, and after all, you still earn 4% on any money sitting in the current account anyway if you decide to transfer the day before the SO is due!

Geoffo_M

I don't think jyugin is talking about 2 accounts within the same organisation; I think he means transferring funds from one building society/bank to another, which indeed takes 3/4 days.

I have accounts within cahoot and when you transfer from one cahoot account to another cahoot account, the transfer is immediate. I presumed jyugin was talking about transferring from outside of Lloyds into his Lloyds current account - which should take 3/4 days

LardyCake

In the "important information" about the Monthly Saver on the Lloyds website it says:

You can have one Monthly Saver either in your name or jointly with someone else. To apply:
* you must be 16 or over; and
* have your main current account with Lloyds TSB. Your main current account is the current account you use most often for your everyday banking. If you don’t use your Lloyds TSB current account as your main current account we can convert your Monthly Saver to a Guaranteed Tracker (or similar account if that account is no longer available).

So I am not convinced that Martin is correct when he says "Lloyds current account needed, but it's no hassle" ... "you can just open an account with £1"

BTW the Guaranteed Tracker pays a miserable 3.15%