Which account?

jknwalker

Im about to undertake a project at home and was thinking the best way to manage my budget and track spending for this project is to set up a separate bank account to fund it. Its going to take about 6-8 months to complete and as Im not the greatest at tracking my expenditure, I want to keep these funds separate from my day to day accounts.
I currently have the funds elsewhere (with much longer notice period) but want to move them to an instant access location. I will need to access funds promptly and preferably pay direct from the account (card, cheque or online). Obviously I want to still earn some interest on this money as I wont be laying out all of the funds at once. I had planned to only transfer a lump sum at the start of the project (circa £18-20k).
Any help gratefully received please!

Gromitt

The halifax online saver used to be great for this, as it offered 2.8% and instant access to funds (as in, you could transfer to a current account within minutes rather than the days of a typical online savings account). Now its 2.05% for balances of under 20K, and upto 2.35% for balances over.

Opening a few Lloyds TSB Vantage account may be worthwhile, if you grab 3, you can earn 3% on upto 18K. You can put more in, but you won't get any interest. They are standard current accounts so you can make payments directly from them.

innovate

Gromitt wrote: »

Opening a few Lloyds TSB Vantage account may be worthwhile, if you grab 3, you can earn 3% on upto 18K.

It's 3% on £3K - £5K balances, times 3 = £15K. (The £6K per account
only applies to the now expired 4% offer).

There is also the Santander 123, which pays 3%AER on balances between £3K and £20K. Though there is a £2/mth charge, which some people eliminate by getting cashback from qualifying Direct Debits. This may not work for the OP, but there is currently a £60 cashback promise on Quidco for opening a 123 current account. Given he just wants the account for 6-8 months, the £24 fee could easily be covered by the cashback - - if it does indeed get paid.

innovate

Also worth mentioning that both the Lloyds Vantage and the Sant 123 need monthly deposits to earn any interest - £1K per Vantage and £500 on the 123.

This money could be cycled between the main current account and the project current account.

jknwalker

Thanks all - great advice. Im now thinking that a Halifax account which drips cash into a Lloyds Vantage maybe the best option. I am expecting to spend money on the project in instalments so wouldnt mind a monthly direct debit to top up the Vantage. I'll investigate the Santander/Quidco route which may be simpler overall though! Frankly Id like the time to spend on the project rather than managing the money to pay for it!