How much interest could I be earning

Johnny_Hamster

Myself and partner both have our salaries paid into a Lloyds account which pays about 0.000001 percent interest. Say our balance is normally £2800 at the start of the month, usually down to about £200 at the end , how much interest could I be earning if I switched to a current account that pays a meaningful rate ?
...And can anyone recommend one - and an easy way round the hassle of changing all the d/d s/o 's ?
Thanks in anticipation...:huh:

YorkshireBoy

Why not stay with LTSB and upgrade to their Classic Plus account?

If you pay in at least £1,000 per month (which you do), and use internet banking 'regularly', they'll pay you 4.00% AER on balances up to £5K.

Assuming you have a 'linear' spending pattern, you'll make around £4 per month interest after tax.

westernpromise

If your balance drops from £2800 to £200 then the average balance would be £1500 ([2800 + 200] / 2). I think A & L pays about 5% gross so you'd get about £75 a year, which after tax is around £60 or £5 a month.

It may only be five quid but it's your five quid!!

straws

YorkshireBoy wrote:

Why not stay with LTSB and upgrade to their Classic Plus account?

I agree with this. I upgraded and it doesn't cost anything.

Paul_Herring

straws wrote:

I agree with this. I upgraded and it doesn't cost anything.

Be careful what you upgrade to however.

Examine the name of the account very carefully.

"Classic Plus" is free with a credit interest rate of 4% below £5000 (0.1% for sums over £5000)

"Select" and "Select Plus" come with monthly fees of £7/month and a credit interest rate of 4% below £5000 (0.1% for sums over £5000)

The latter would require an average balance of £2625 to counteract the fee - based on 20% marginal tax rate. This assumes you have no use whatsoever for the 'benefits' it gets you. ("Fee free for the first 3 months" only for new customers apparently.)