Help where should I save £10,000

MoneySaverLog

Oh btw if I had £10k to put into these vantage accounts now I'd have 3 of them. Two with £3,000 in and a third with £4,000 in. Cycling £1,000 between all three each month. That's because the 3% is paid on balances of £3k and above.

You can then work on building each vantage account up to the £5k limit.

martinsmith11

It don't work like this you can't shift £1000 into each account and take it out as interest is calucated daily so if you have £1in it it would only give you interest on that.

As the 1st month i opened it i put in £5 and go no interest but when i kept £10000 the next month i got paid £11.00

MoneySaverLog

Part of the conditions on the vantage account is that you pay in at least £1,000 a month into the account in order to get vantage rates of interest.

So if you just left £5,000 in the account and did not at least put in and take out £1,000 that month you'd earn no vantage interest in that month. Hence the need to cycle a £1,000 through each month.

Explained right at the top of this page http://www.lloydstsb.com/current_accounts/vantage.asp

martinsmith11

it says if you have a balance of £5000 you get the rate i kept money without putting anything in and get paid the higher rate still

MoneySaverLog

Quote direct from Lloyds Tsb site linked above....

"Make your current account smarter with Vantage Adding Vantage to your Classic or Added Value Account is a smart way to get more from your current account. As long as you pay in at least £1,000 a month and stay in credit, you’ll earn tiered variable interest on your whole balance up to £5,000."

Edit: Link to full T & C's http://www.lloydstsb.com/current_accounts/vantage_ts_and_cs.asp

Ultrasonic

martinsmith11 wrote: »

I currently got £5000 in a llyold vantage account paying 3% what should i do with the remaining £5000. I don't mind keeping it for 2-5 year locked up, looking for a passbook or any good suggestion thanks.

If you are sure you won't want the money for the next couple of years then there are options that will earn you more interest than the 3% on another Vantage account.

I think the highest paying 2 year option would be to put this year's cash ISA allowance (£5640) into Santander's 2 year fixed rate ISA that earns 4% interest. (Also note that if you unexpectedly desperately need the money you can take it out by closing the account, but at the loss of 120 days interest.) [I'll leave it up to you to decide if you are happy investing with Santander at the moment, but note that provided you don't have more than £85k across all of your accounts you would be completely protected by the FSCS.]

You could keep the remainder in your existing Vantage account, but I think I'd shift it to the Post Office savings account. This would earn you slighty more interest (3.17%) and would stop you having to worry about paying in £1000 every month.

martinsmith11 wrote:

I am a student don't pay tax i think

Just in case you have a significant source of income we don't know about, I'll add that being a student doesn't of itself exempt you from paying income tax. But if, as is likely, your income (excluding student loans, scholarships and educational grants) is less than £8,105 p.a. then you will not have to pay income tax.

Putting money into an ISA probably makes sense though since they currently tend to offer the highest gross interest rates, and because if you still have this money saved when you do start earning enough to be taxed, the tax free status will be advantageous.

MoneySaverLog

Ultrasonic wrote: »

Putting money into an ISA probably makes sense though since they currently tend to offer the highest gross interest rates, and because if you still have this money saved when you do start earning enough to be taxed, the tax free status will be advantageous.

Something to consider, it's not about now it's about later in life when you do pay tax. Personally I'd avoid Santander but that's just me.

Ultrasonic

MoneySaverLog wrote: »

Personally I'd avoid Santander but that's just me.

Due to crap customer service or concerns over them going bust? (I couldn't recommend them for a current account due to poor service I've had with them, but for savings I've never had a problem. There's far less scope for them to mess things up there I think.)

atush

martinsmith11 wrote: »

It don't work like this you can't shift £1000 into each account and take it out as interest is calucated daily so if you have £1in it it would only give you interest on that.

As the 1st month i opened it i put in £5 and go no interest but when i kept £10000 the next month i got paid £11.00

But what did you get paid for the next month/year? Sounds to me you are getting less than you think? 11 quid for one month on 10K is less than 3%?

martinsmith11

I only get 3% on balance of £5000 and only 1% on balance over £5000 so £11 is about right.