Advise needed thoroughly confused with savings accounts

maudley

Hi all

I've been trying to work out the best way to save my scholarship money, as I would like to save as much of it as possible for a deposit for a house. At present I have no savings. My scholarship payments are for 3 years.

As far as I'm aware I do not pay tax on my savings.

My scholarship is £16,590 per year which is paid into my current account monthly (£1382.5 / month)


I plan to open the Santander 5% + £100 sign up account and use it as my current account, this is where my £1382.5 / month will be paid.
(This account pays an interest rate of 5% of balances up to £2,500.)

My expenses per year is approx £6,582 which leaves £10,008 pounds or £834 / month that I would like to put into a regular savings account.

I plan to open the Santander 5% First Home Saver and put the maximum amount £300 in every month.

I also plan to open the Santander 4% for 13 months and put the maximum into it £250

This leaves £284 per month my first question is where shall I put this?

I also have the Tesco 0% for 13 months which I plan to use for purchasers which will leave a maximum of £6,582 - minimum monthly credit card payments, where shall I put this money?

Finally is there a better option to the above that I have missed out?

Thanks in advance,
Matt

xrjtg

Firstly, what you've got so far looks excellent. Well done!

If you're sure about the £284 a month you could open another regular saver elsewhere. There are a few paying 4% in the article on the main site.

You might want to acquaint yourself with Lloyds Vantage if you aren't familiar with it already. It's a current account that pays 4% on balances between £5000 and £7000 provided you pay in £1000 a month, but you can satisfy this requirement with transfers from elsewhere.

Since you don't seem averse to juggling lots of accounts a Halifax Reward current account is worth having if you don't have one already. You can meet the funding requirements using the same trick as for the Lloyds Vantage.

maudley

Thank you xrjtg I think I've missed a trick! So If i sign up to the Halifax reward account I could transfer £1000 from my Santander account to it in order to meet the minimum requirements?

The reason I wasn't too interested in the other 4% regular savers accounts was because I wasn't close to the branch or they were not set up for online banking. Thank you for your advice.

lisyloo

As far as I'm aware I do not pay tax on my savings.

Tax is deducted automatically at 20% UNLESS you have filled out an R85 form to say your exempt.

I don't know if you scholarship counts as income, but if it's does then you should (and probably are) paying income tax.
If it's exempt and not counted as income then you need to fill out the R85 form and also back claim any tax you've already paid (I think you need for R40 and past statements to claim back tax already paid from the IR). Some banks/building societies may have agreements with the IR to pay it back directly, but s**ds law says you have to fill out the form and claim back from the IR.

xrjtg

maudley wrote: »

So If i sign up to the Halifax reward account I could transfer £1000 from my Santander account to it in order to meet the minimum requirements?

Exactly. You can then send it straight back out again. It can all be done in two minutes with Faster Payments.

maudley wrote: »

The reason I wasn't too interested in the other 4% regular savers accounts was because I wasn't close to the branch or they were not set up for online banking.

I've had one that was operated by post before, and I didn't find it at all awkward because after you've opened the account and set up your Standing Order there isn't any interaction required until you close it after the year's up.