Graduate with first proper job...maximising interest

hammertime_1990

@Innovate, Many thanks for your kindness and advice. What is the deal with First Direct? I'm not on a high enough salary (is it £23,500 I think Martin specifies) to take advantage of any of this? I could only pay in £1200 per month and not £1500 ?? I would love to use First Direct as they are simply the best - how could I use them best??

Many Thanks Again

innovate

You don't have to pay it all in at once - - -

Say you get you salary paid into your Lloyds account.

You then pay £500 by standing order into your FD the day after you get paid. A few days later, you pay that £500 back into your Lloyds, again by Standing Order.

Repeat twice, and you have paid £1.5K into your FD account - so you have met the £1.5K minimum monthly deposit. (I can guarantee this works because it's in essence what I have been doing for the last 2 years. It also works with any / between other current accounts).

Standing Orders usually get executed by Faster Payment on working days - but perhaps allow a few days between the transfers, to make sure you don't go overdrawn by mistake. Alternatively, you can do it manually with online transfers - - but seeing that you have a full time job, it's better to let technology do it work you

To get the £100, I think you must have some Direct Debits on your FD account. Not entirely sure whether now whether you can set them up yourself or whether you have to use the FD switcher service - you need to read up about this. You could most likely still keep your Lloyds account and just send a bit more by SO to you FD every month.

Once you have the FD current account, you can also use their Regular Saver/

DreamerV

hammertime_1990 wrote: »

@Innovate, Many thanks for your kindness and advice. What is the deal with First Direct? I'm not on a high enough salary (is it £23,500 I think Martin specifies) to take advantage of any of this? I could only pay in £1200 per month and not £1500 ?? I would love to use First Direct as they are simply the best - how could I use them best??

Many Thanks Again

I'll graduate 2013, and do not have an income high enough to get the £100 bonus from FirstDirect. However if you get your wages paid in there, and transfer money in from another account to make it up to 1500 over the month (can be recycled money from your salary), you still qualify for the £100 bonus. Also they give you a free £250 overdraft for the first year. I have opened this week a First Account (current account) and a First Regular Saver (8% over the year on £300 going in monthly) which equates to 4.33% as you have less in there at the start of the year and more at the end. I'll get £156 gross (and net as I don't pay tax yet) at the end of the year and the balance will be £3600. You can pay in between £25 to £300 monthly. You cannot withdraw within the year though for that one, but it would still be useful to open a First Account for the £100 bonus at least.

Innovate beat me to it. I can confirm though you need to use the switching service to get the bonus.

jennifernil

You can have a First Direct account without paying in the £1500, you just open a qualifying savings account and deposit £1 in it. You will not get the £100 for opening I don't think, but you get the good service and access to the 8% regular saver.

You can save up to £300 per month, but no withdrawals.

For an ISA you could look at Nationwide instant access paying 3.1% once you have £1000 to open it with.

hammertime_1990

@ Innovate, i love that standing order idea and assuming that at the end of all of the switching, i had the £500 i wanted to save in my first direct "1st" account, it could then be transferred into an e-isa or regular saver, or both?

Would that maximise interest?

Many thanks for your continued help!

hammertime_1990

(In the above post, i meant split between both!)

hammertime_1990

also, is halifax's £5 per month better than Lloyds Classic Account Vantage?

Many Thanks!

innovate

Yes, sure, once the monthly "ring-a-ring-a-roses" cycle is complete, you can drop your surplus money into one or more savings accounts. You'd probably do that with Standing Orders, too (in the case of the FD Regular Save, I seem to remember you must do it by Standing Order - - - but it makes sense anyway to automate as much as you can).

Just takes good, realistic upfront planning of what gets sent to where when, and then set up accordingly. And then monitor that things happen as expected - at least for the first monthly round.

innovate

hammertime_1990 wrote: »

also, is halifax's £5 per month better than Lloyds Classic Account Vantage?

Probably, yes

You can make an easy £60 from Halifax if you can pay in £1K a month (again, it doesn't have to be all in one lump). Halifax are evil on overdrawn accounts though, so be 100% sure you never get into the red (shouldn't be a problem for you but I just mention it).

It much depends how much you'd have in your LLoyds Vantage account whether you can beat that £60. I think somebody worked out earlier it's something like £24 p.a. if you always have £1,200 in your Lloyds account.

Thus it seems a lot easier to make money from the Halifax account.

In any case though, you do need at least one current account at each of at least two different banks in order to do all those SOs (when you have done this for a bit, you won't blink at doing this across half a dozen or more accounts)

hammertime_1990

innovate wrote: »

Yes, sure, once the monthly "ring-a-ring-a-roses" cycle is complete, you can drop your surplus money into one or more savings accounts. You'd probably do that with Standing Orders, too (in the case of the FD Regular Save, I seem to remember you must do it by Standing Order - - - but it makes sense anyway to automate as much as you can).

Just takes good, realistic upfront planning of what gets sent to where when, and then set up accordingly. And then monitor that things happen as expected - at least for the first monthly round.

So the idea of taking the resulting £500 and placing £300 in the regular saver and £200 in a cash e-isa sounds good to you?

Kind Regards!