So confused about which account is best!

sali84

Hi all,

I'm looking into the options for bank accounts for my partner and I, and I'm getting myself confused over what is the best option for us!

At the moment we both have seperate current accounts with Halifax (reward accounts), and an ISA each (mine is Halifax - 1.65% and his is Barclays - around 1% I think, interest is paid annually on both). I also have a first home saver account with Santander with an interest rate of 3% paid annually.

My OH pays all the bills from his account, and I pay my own phone bill, monthly bus pass and do our food/household shopping. We're in the process of buying a house together, and want to set up a joint account for household expenses. We've agreed to contribute a percentage of our income into the joint account, but keep our own accounts for our own spends and treats.

We have around £20k in savings between the ISAs and my Santander account, but the majority of this will disappear when the house purchase goes through to cover the deposit and fees etc. I know the ISAs we have aren't the best rate, but seeing as the money will only be in those accounts for another couple of months, I was wondering whether it would be worth using the money in them to set up a joint Santander 123 account or a Nationwide FlexDirect account rather than transferring them into new ISAs. We haven't paid into our ISAs in this tax year. Does this seem like a good option? My thinking is we can use it as a savings account for the time being, paying a couple of smaller bills out of it, and then use it as our main joint account when the house purchase goes through.

Can anyone think of any better options?

innovate

If you are certain that you will need most of your cash soon for your house purchase, you might as well try and get the best interest rate, rather than leaving your money linger in 1.65% and 1% accounts. Though with interest rates as they are, you won't make any mindboggling profits. See the upside, though - - inflation is relatively low, too. And you should be able to get a mortgage at a reasonable rate.

FlexDirect @5% for a year on up to £2.5K is a good account - - each of you could have one. The Santander 123 can be great for cashback on typical DDs - - council tax, utilities, phones. Use their calc to figure out whether it's worth it for you http://santander123.co.uk/

If I were you, I would try to keep 6-10 months of living costs in ready cash (your "rainy-day fund"). You never know when you need it.