Am I wrong to keep all my money in a Current Account

Primrose

Well, it's nice to have that amount of money in a current account but it's not very sensible. For one thing, you're above the £50K compensation limit. For another thing, it's not wise to rely on your bank's advice because the products they can offer will only be their own, and probably not the most competitive on the market.

Have your used up your annual ISA allowance? As a taxpayer that should be your first priority. Look around and fill that up. Whilst I understand your desire to keep your finances simple, the more you save (and you say you're a prudent person), the more money you will build up. Sooner or later you're going to have to spend a little time managing it responsibly. (Surely it's worth it if you've slogged hard to save it in the first place?).

I'd look around for some fixed term bonds. If you really want to keep your finances simple, you could take out two different bonds for about £40K each (to allow for interest taking you to the compensation limit). Even if you run the risk of losing out a little if interest rates rise, some 2 or 3 year bonds with different banks or building societies would mean you wouldn't have to worry about researching other homes for the money for some time. Make sure that you leave enough spare cash to use up your £5100 cash ISA allowance every year.

You don't say whether you own a house and have a mortgage? Would buying your own home be another way of using your savings?

And with that amount of money in the bank, I sincerely hope you've made a Will ?

TheProdigalSon

Hi all,

Thank you for the great advice so far! I do indeed have an Cash ISA which is held with RBS, this pays 3.51% but I make a point of maxing it out on the first day of each financial year and this means that I'm unable to put anymore money there until next April. I have a substantial amount of money there already as I've been saving into my ISA for a few years now and it's when I realise the amount of interest I'm getting there compared to not receiving anything at all on my Current Account and that's what annoys me as I love to save and simply want a good rate of return for doing so. As I seem to be able to save so much my problem is not that I can't save money but rather that I don't know where to put it for the best rate of return. As I say, I now only keep my Current Account open other than my Cash ISA as it's the only account that I held with my bank that was worth keeping open, returns of 0.10% just aren't worth the hassle to me and I'm sure most people would agree with that. I already own my home and have experimented with Zopa in the past. I also buy and sell a few things on eBay but this is more of a hobby than anything else. Unfortunately Primrose, I haven't made a will as yet, didn't think I'd need one with being a young man and all

Best wishes and have a great night everyone.

scott_lithgows

If you are south of the border,Santander will take over your RBS account and lose your money.

Stompa

Many years ago (in pre-internet days) I had a current account which paid an interest rate better than most savings accounts, so consequently I kept a pretty large sum in there. When using cash machines I sometimes used to wonder what might happen if my card and PIN were stolen enabling the thief to find out the balance and then have a field day!

Primrose

Prodical Son - If you already own your own home, have a substantial sum of money in cash ISAs, and £75K in the bank, you definitely need to get that Will finalised as soon as possible, no matter how young you are. I reckon you can afford to spend a few quid on paying a solicitor to sort that out for you. If you're going to continue earning and putting money away at that rate, it may not be too long before you're also needing some good Inheritance Tax planning advice !

And if you're unattached, I'd be careful about not sharing too much of your financial information on romantic dates in the early stages. There are a lot of gold diggers about who might regard you as a very profitable meal ticket. Start off pleading poverty and always go to cheap restaurants!:rotfl:

barak

scott_lithgows wrote: »

If you are south of the border,Santander will take over your RBS account and lose your money.

From someone apparently north of the border, that seems a strange comment when the UK government [which effectively means us, the taxpayers] has had to take a controlling interest in both of the formerly great Scottish banking groups.....!

mp80

I smell a rat!

ERICS_MUM

barak wrote: »

From someone apparently north of the border, that seems a strange comment when the UK government [which effectively means us, the taxpayers] has had to take a controlling interest in both of the formerly great Scottish banking groups.....!

I think he probably means "mislaid" rather than "lost through greedy investment" IYKWIM. Santander do seem to have a problem locating funds at the moment.

dwsjarcmcd

My question to the OP is why the loyalty to RBS? As you've already stated they have cut your savings rates - by no means unique to them - but remainded with them for all your financial affairs. Banks and Building Societies rely on this sort of behaviour. Why not look at other providers and move your money? In this day and age of electronic I.D. and easy transfer of funds it's not difficult.

Would you pay RBS £2,000 per annum to look after your money because that is effectively what your doing.

barak

ERICS_MUM wrote: »

I think he probably means "mislaid" rather than "lost through greedy investment" IYKWIM. Santander do seem to have a problem locating funds at the moment.

You may be right - it's clearly been a bit of a nightmare integrating Abbey/A&L/B&B, each of which had their own staff and sometimes not very user-friendly systems - hopefully things will settle down soon.