Best Savings Account (House Deposit)

Alex92_2

Hello,

For the last couple of years I have been banking with Lloyds TSB on their classic vantage account. Reason for this was that at the time of registration, the 4% interest rates paid much more than any other bank accounts out there and even more than their own Cash ISA's .
I set up 3 classic vantage accounts and bounced 1k (minimum you needed for interest rates) between each one. So my salary would go into Account A, then transfered to B, then B to C. That way I didnt go over their 7k limit and reaped interest from it.

Anyway, fast forward a few years and it seems that they have lowered this limit to 4 or 5k. Also, I much prefer the idea of having all of my savings in one large account, rather than bouncing between each account every month.

I have looked into First Directs 8% Savings account and toyed with the idea of scrapping lloyds (despite loving their online banking and ease of use). On 20k Savings in my Lloyds account, I am getting ~£9.73 interest per month. Comparing this with First Directs 8%, where I would be getting £1600 per year and approx £134 per month (!) Not to mention the £100 cash back for changing over and the £100 after paying in £1500 for the first 3 months, making it 1800 per year and £150 per month.

Can anyone advise me what is best to do with my money in terms of savings. Realistically, I dont think that I will be touching it within the year, but I would like to be able to take it out without getting a penalty if I wanted to.

I would also like interest paid monthly rather than annually. Is this possible? I've heard mixed things about FD savings. Their website would suggest its paid monthly, but people on here and on google seem to say its paid yearly.

Please can someone advise me where it is best to put my money to get the optimum interest, as lloyds tsb is rubbish for me at the moment.

Saving (not earning) around £1200 each month at the moment.

Please help me out. Also, excuse the layout of this thread. I'm sort of thinking out loud and I am only 20, so still pretty new to this all.

edit: so the question is really. Is FD Savings account a good account to use for the 12 months, and then swap my money again before interest rates shoot back down to minimal. Or is there anything that would suit me better? Lloyds is handy for me at the moment despite the poor interest rates because I have credit card linked up with my accounts so that it pays out automatically (got one so I can get a good credit rating for a mortgage). But that is pretty much the only reason im staying. The devil you know, I guess.

psychic_teabag

The FD 8% account is a regular saver. You can add up to £250 or £300 or so per month. You can't just dump £20k in there and get 8% on the lot.

The Lloyds limit is currently £6k for 4% for 1 year (special offer available to the end of the month)

calypso_rhapsody

But it seems that the special offer applies to new accounts only and the OP already has vantage accounts?

Upwind

psychic_teabag wrote: »

The FD 8% account is a regular saver. You can add up to £250 or £300 or so per month. You can't just dump £20k in there and get 8% on the lot.

The Lloyds limit is currently £6k for 4% for 1 year (special offer available to the end of the month)

It's blurb actually states that it's "a whopping 4% AER/3.93% Gross variable, tiered interest on balances up to £6,000 until 31 October 2013".

* This is based on the gross rate paid with a customer maintaining a constant daily balance of £6,000 consecutively for 12 months, remaining in credit and paying in at least £1,000 per month.

calypso_rhapsody

If you have £20k in Lloyds Vantage then you are only earning interest on £15k (3 times £5k).
Have you done a cash ISA for this year? There is an annual limit so you can't put all £20k in.... but it would mean you only have £15k in Lloyds.

You will find it very hard to find an instant access account paying more than the 3% you are getting from Lloyds vantage. You could look at the M&S products that are fixed rate accounts but you can get out early if you want, for a penalty. http://bank.marksandspencer.com/save-invest/fixed-rate-savings/overview/ They are paying 3.1% for one year (more for 2 or 3 years) but there is a £50 penalty if you want out before the year is up (£75/£100 for 2/3 year product).
The penalty would wipe out any gain made from moving from Lloyds though (if i've done my sums right). If you think you could leave the money untouched for a year you can probably do better - look at the best rates info on this site.
If you are saving £1200 per month (your wording was a little ambiguous) then you could look at putting those into regular savings accounts - there are several but most are limited, like FDs, to a few hundred a month - take care too as in most cases you are committing to pay that amount each month.

Alex92_2

psychic_teabag wrote: »

The FD 8% account is a regular saver. You can add up to £250 or £300 or so per month. You can't just dump £20k in there and get 8% on the lot.

The Lloyds limit is currently £6k for 4% for 1 year (special offer available to the end of the month)

So, I can only start up the FD 8% account with £250-300 each month? Shame really, because with what I save each month, I'd never be able to put all my money into the regular saver account.

Upwind wrote: »

It's blurb actually states that it's "a whopping 4% AER/3.93% Gross variable, tiered interest on balances up to £6,000 until 31 October 2013".

* This is based on the gross rate paid with a customer maintaining a constant daily balance of £6,000 consecutively for 12 months, remaining in credit and paying in at least £1,000 per month.

Got 15k in one of my Lloyds classic vantage accounts and I am earning £9.73 on it.. Note that 1% of 15,000 / 12 = £12.50. So I am getting under %1 Interest on it, despite paying in over £1k each month.

I've just noticed that I have to have 2 direct debits each month to qualify for that interest rate, which has definitely changed since when I had opened the account a couple years ago.

It seems that if I stay with lloyds and want better interest, the only option for me is to open up an e-saver or ISA, the only major downside for me being that interest is paid annually, rather than monthly.

What I'm looking for is a good account, that will allow me to receieve interest monthly, preferably be able to access money without losing interest on it (so not fixed bonds), that I can keep £20k+ in and add money each month to contribute towards my savings.

Alex92_2

calypso_rhapsody wrote: »

If you have £20k in Lloyds Vantage then you are only earning interest on £15k (3 times £5k).
Have you done a cash ISA for this year? There is an annual limit so you can't put all £20k in.... but it would mean you only have £15k in Lloyds.

You will find it very hard to find an instant access account paying more than the 3% you are getting from Lloyds vantage. You could look at the M&S products that are fixed rate accounts but you can get out early if you want, for a penalty. They are paying 3.1% for one year (more for 2 or 3 years) but there is a £50 penalty if you want out before the year is up (£75/£100 for 2/3 year product).
The penalty would wipe out any gain made from moving from Lloyds though (if i've done my sums right). If you think you could leave the money untouched for a year you can probably do better - look at the best rates info on this site.
If you are saving £1200 per month (your wording was a little ambiguous) then you could look at putting those into regular savings accounts - there are several but most are limited, like FDs, to a few hundred a month - take care too as in most cases you are committing to pay that amount each month.

I did have 15k spread out into 3 different classic vantage accounts, but got fed up of constantly having to bounce the money from one account to the next to qualify for interest. So I renamed some accounts. I have
1) Card Account (keep between 1500-2500 in this). My monthly wage goes into this.
2) Savings Account, this is where my savings from wage comes into and also everything from bank number 3
3) Misc Account, anything I have sold via ebay, paypal, gumtree etc comes into this account, after it reaches 300-500 ill transfer it into my savings account.

Saving £1200 per month roughly and that is what will be going into my savings account.

I havent got an ISA set up, purely because the rate was so low. (2%). Even with tax deducted, 4% from the classic vantage accounts gives better interest than that, AND pays monthly.

I think it seems as though my only option for what I want, would be to split up 15k into 3x5k bank accounts (that I already have existing) and open up another account to put the extra money and future money into? Although, I dont have many outcomings at all and there is no way that I could get 6 standing orders for all 3 of my accounts to qualify for the interest.

Do you see my dilemma? That's why im looking for an account that pays a good rate that I can get monthly and can keep 20k+ in it

thanks for all the help guys.

innovate

Alex92 wrote: »

Although, I dont have many outcomings at all and there is no way that I could get 6 standing orders for all 3 of my accounts to qualify for the interest.

Done very easily - - e.g. with a couple of Tesco savers. Or there are some other ideas https://forums.moneysavingexpert.com/discussion/4168667. You need to get moving with it now, though -- it will take a few days for DDs to show in your Lloyds accounts, and you must have them by end of the month.

Another option you might want to consider is the Santander 123 account - -currently paying 3% on balances between £3K and £20K. Plus cashback on certain Direct Debits. It costs £2 a month but for many people, the benefits are a lot higher than £2. Also, you can probably get £55 via Quidco for opening the account.

Alex92_2

innovate wrote: »

Done very easily - - e.g. with a couple of Tesco savers. Or there are some other ideas You need to get moving with it now, though -- it will take a few days for DDs to show in your Lloyds accounts, and you must have them by end of the month.

Another option you might want to consider is the Santander 123 account - -currently paying 3% on balances between £3K and £20K. Plus cashback on certain Direct Debits. It costs £2 a month but for many people, the benefits are a lot higher than £2. Also, you can probably get £55 via Quidco for opening the account.

Does a credit card repayment count a direct debit/standing order? I dont like all this moving my money around malarky. I wish I could just keep it in a normal bank without touching it that I get monthly interest on. Dont HSBC have a 4% savings account? Will look into that now.

Alex92_2

My only real out comings each month is;
Rent: £200
Petrol: £120
Gym Membership: £35

And I may spend £100 on myself for various bits and bobs, like coffee if im out or little bits like that.

Petrol is paid via credit card each month, so that I can try and get a good credit rating which will be useful when I come around to get a mortgage.

Best case scenerio with my lloyds vantage accounts is having 3x5k accounts which would each get me around £14 per month, £42 per month. Which isnt fantastic by any means.

I'm starting to consider putting a lump sum away for 1 Year and slowly adding to it, whilst keeping say 5k in a card account incase I have anything go wrong with my car, or insurance to pay out for etc and still paying £1200 each month into that 1 year bond (providing the interest gets recalculated often), even then though, the rates are so appauling for holding my money for 1 year that for the sake of £50 or so, is it even worth it?

innovate

Alex92 wrote: »

Does a credit card repayment count a direct debit/standing order?

Standing orders are no use for that Vantage offer. If you pay your credit card by DD, it would of course count.

However - - - if you pay big bills from your Vantage account(s), this could defeat the object. Because as soon as your balance drops below £5K, you will not get the 4% any longer.

Some tiny DDs (e.g. for £1) are ideal for making the best out of the Vantage offer.

Alex92 wrote: »

Dont HSBC have a 4% savings account? Will look into that now.

They have a Regular Saver with 4% but as with the FD, you cannot dump £20K into it. Apart from the Vantage won't find any instant access account that pays 4% these days.