Really optimising interest from banks

Alex92_2

Hi,

I was wondering who else plans or is currently really optimising their interest from the banks and taking full advantage of all schemes and deals setup.

I have 3 Lloyds Classic Vantages with £6K in each, also, come April 2013 will have £11400 in Cash ISA and then, depending on once I find out if the 5% nationwide deal is for one account or multiple, I will set up 1 with £2500 giving me 5% interest (£100 per year).

edit: To summarise. The purpose of this thread is to bring to light any good deals with high interest rates that most people will overlook. It's not to do with ISAs or easy access bank accounts, rather monthly savers, cashback deals and anything along those lines that help the annual interest figure (or monthly) add up.

What I am looking at now, is cashback deals, such as Halifaxes £5 a month reward account, First Directs £100 cashback if you switch with them and the various 6% Monthly Savers accounts (Which I plan on using to, A) Get good interest (4.2% net) and B)Put my money for 14/15 Year ISA in the best possible place.

What others are there like this available? I'm sure ive missed out on a few purely as i've been looking at bank accounts (4% Vantage, 3% Santander 123 account, BoS 3% accounts) and ISAs. Completely missed all these other bits, but a rough guess - it would see me around £300-£400 a year better off.

Background: 20 years old. Saving around £1600 a month. No mortgage, no debt, no car on finance. Plan on getting my first property somewhere between 2015-2016, depending if I find the right place. Maybe longer if there is nothing that leaps out to me. Also due pay rise soon.

curlygirl1971

I wouldn't say I fully optimise the opportunities to earn interest but it has been on my agenda to some extent in the past. I have got (and have had) lots of different accounts, but have never done it to the extent you are talking about.

I can't gain the First Direct Current Account switching bonus as I've previously had an account with them (ISA a few years ago) and therefore I'm not eligible

I discounted the Santander 123 account because my bills are relatively low (and I need some DD's elsewhere) and therefore any cashback gained is nearly wiped out by the monthly fee of £2.

I'm currently looking at the Nationwide Account that pays 5% gross on £2.5k.

What I've found however is that many of the current accounts offering good interest rates / offering rewards - have stipulations. So I've found that having a lot of Current Accounts can take a lot of careful management. I'm all for building up interest - over the years I've really worked at it to make the most of a relatively small pot of savings....and it's paid off. But I don't really go for it in a big way because things can go wrong. I've know transfers fail (even though they were confirmed), I've been kicked out of online banking for days, I've forgotton about a bill going out, I've been in hospital unexpectedly - and panicking about my finely tuned financial arrangements!

I don't know a lot about the impact of credit checking on your file, but I think that's another issue to bear in mind if you're applying for a lot of accounts.

I wish I'd been in your position at your age! Without wishing to be patronising - Well done.

Alex92_2

curlygirl1971 wrote: »

..

I dont take it in a patronising way at all. A lot of people who are older (even early 30s) say the exact same thing. Been in a lucky (arguably, have also worked my butt off and spent countless years of networking) situation, in the fact that I have been in constant full-time employement since leaving A-levels (18) and did part-time work before (15 onwards). Have also been good with investing/saving and making the most of my money (whilst not being a tight !!!! and having no fun at the same time).
It's a nice feeling,as nasty as it sounds, knowing your friends coming out of university at 22 with £45K debt and struggling to find ANY job, even as a waiter in a restaurant paying £8K a year, when you are in zero debt, have £35k+ savings at 20 years old and a very good, well paying job that is secure and has a lot of perks and promising career prospects.

Credit rating isn't a number one priority for me at the moment, as I dont plan on having to borrow any money for atleast 2-3 years, when I start looking for a house to buy. Hopefully, it will clear up a bit in the meantime. I'm not sure how much of an effect it has on it though.

This week I have;
Setup Halifax Rewards account for £5 per month
Setup Santander 123 Account via QuidCo (getting £55 cash back)
Setup Nationwide FlexDirect 5% on £2,500 account (may open more of these depending on how many you can get 5% on.)
Setup First Direct 1st Account for £100 Cashback.

Then setup First Direct E-Saver to remove waiver the monthly fee and have a Santander E-Saver account now that I will use for its direct debits use (halifax requires 2 DDs from 2 different organisations,so will use Tesco and Santander).

Have effectively made £215 in last few days by taking advantage of these reward/deals. I'm sure there are some other ones that I am overlooking too.

Before hand, I always thought £5 a month, thats nothing. But if you have a few of these reward accounts, they really start to add up and pay for the little things (petrol, going out, food, contribute towards rent) etc.

Excluding the money I have set aside for investments (buying and flipping, see £500 thread) I am now getting £1576.00 a year interest, which is £131.33 every month (this is including cashback deals, but I have just divided the amount by 12, even though its paid in lump sum (santander and first direct).

All in all, not too bad at all. Almost get a month's salary for doing nothing except optimising interest from every bank and making use of all the deals.

curlygirl1971

You might also be interested in the Halifax Clarity Reward Credit Card. If you have a Halifax Reward Current account (and you fulfil the criteria for that) you can get £5 a month Clarity reward if you spend £300 on the CC. I just make sure I pay it off every month and another £5 in my pocket (well they deduct it from the balance due for payment so when I pay my bill I also pay £5 into my savings)

It's not offered online - you have to go into branch.

bsms1147

Alex92 wrote: »

I am now getting £1576.00 a year interest

Sounds good, where's it all coming from?

anselld

Alex92 wrote: »

Hi,

I was wondering who else plans or is currently really optimising their interest from the banks and taking full advantage of all schemes and deals setup.

To "really optimise" interest you need to have the same money earning interest in several places at once.

eg, it is possible to earn interest at LTSB, Santander and First Direct simultaneously with the same money....

http://www.stoozing.com/forum/YaBB.pl?num=1328446462/0

Alex92_2

curlygirl1971 wrote: »

You might also be interested in the Halifax Clarity Reward Credit Card. If you have a Halifax Reward Current account (and you fulfil the criteria for that) you can get £5 a month Clarity reward if you spend £300 on the CC. I just make sure I pay it off every month and another £5 in my pocket (well they deduct it from the balance due for payment so when I pay my bill I also pay £5 into my savings)

It's not offered online - you have to go into branch.

That could be interesting! Is it 0% card? I currently have a Lloyds Platinum credit card, but only buy petrol with it to build up my credit rating. Trouble is, I dont think I spend over £300 a month on stuff that could be purchased with a CC (first world problems! haha). Monthly outgoings is usually around £300-380, £200 rent to my dad (standing order) and Petrol is now only £40, was £120 (changed gym to one that is £5 cheaper and in walking distance from where I work, so £0 on petrol and save myself £80 petrol a month! Brilliant or what?! Could be worth doing this though should my outgoings increase.

bsms1147 wrote: »

Sounds good, where's it all coming from?

I will let you know the banks/accounts tomorrow. My finance spreadsheet and wordsheet are saved on my removable hard drive which I left at work.

Alex92_2

anselld wrote: »

To "really optimise" interest you need to have the same money earning interest in several places at once.

eg, it is possible to earn interest at LTSB, Santander and First Direct simultaneously with the same money....

http://www.stoozing.com/forum/YaBB.pl?num=1328446462/0

About to pop out, but will have a long read through this tomorrow. Sounds interesting.

psychic_teabag

curlygirl1971 wrote: »

I discounted the Santander 123 account because my bills are relatively low (and I need some DD's elsewhere) and therefore any cashback gained is nearly wiped out by the monthly fee of £2.

If you have £20k looking for a home, the 123 account is still pretty good even if you don't get any cashback. If you view it as a deduction from your interest, you still get around 2.8%, which beats all the instant-access savings accounts I know. (You might need a couple of D/D's to qualify for interest. There's a thread elsewhere listing some savings accounts which can create D/D's. Tesco is a good one.)

I don't get much more than £2 cashback, but it still seems like a good deal to me. Plus I got £50 from quidco for opening it :-)

Alex92_2

psychic_teabag wrote: »

If you have £20k looking for a home, the 123 account is still pretty good even if you don't get any cashback. If you view it as a deduction from your interest, you still get around 2.8%, which beats all the instant-access savings accounts I know. (You might need a couple of D/D's to qualify for interest. There's a thread elsewhere listing some savings accounts which can create D/D's. Tesco is a good one.)

I don't get much more than £2 cashback, but it still seems like a good deal to me. Plus I got £50 from quidco for opening it :-)

2.40%(after tax) of £3000 (minimum for 3% qualify) is £72 PA, £6 PCM. Take off £2 for monthly charge, this makes the rate drop down to 1.60%. 1.60% of £3000/12 (months) is £4. The absolute minimum £3K, will effectively give you 1.60% interest after tax, which imo is very lousy. However, if you used cashback and got £55, then first year (with monthly charge) will give you 3.50% (after tax)

55 (cashback) minus 24 (first year charges) = £31.

£31 / 12 (months) = 2.58

If 2.40% of 3000/12 is £6.
3.50% of 3000/12 is £8.75(roughly £2.60 added per month).

So really, if you used quidco and got £55. For the first year on Santander AFTER monthly charges (and excluding every single 123 perk, e.g. no cashback on any bills) you are looking at just under 3.50% net interest. Which isnt bad at all imo.

Obviously this will only apply to £3000 as a mathematical example.

Shark

What do you do at 20 to earn that income?