Can someone explain how much I will benefit?

Burlesque_Babe

ok, this is going to make me sound a bit stupid, but hey ho I'd rather ask than regret not opening my mouth.

I have £15,000 to invest in savings.

I've put £3,000 in an NS+I ISA, no problems, sorted.

I plan to put the remaining £12,000 in the ICIC HiSave account which offers 6% and I've sent off the nominal £1 to open the account.

Reading Martin's 'money fountain' I should then drip feed to a high interest regular saver. I plan to move £500 a month to the Yorkshire Building Society which offers 7%.

The stupid question is - if I'm taking from one account every month and adding to another, will the interest not just cancel itself out?? Or is there some benefit where I will somehow get two lots of interest which in total will be more than just leaving it with ICIC??

After two years, the chances are I won't have any more to move, so should I move a smaller amount for a longer period?

thumshie

The advantage is that the money once it's in the regular saver will be earning 7%, not 6%..

After two years, the chances are I won't have any more to move, so should I move a smaller amount for a longer period?

No, after two years scale back to what you can afford, £20 a month minimum to still get the bonus to make it 7%..

debbie42

keren29 wrote: »

Reading Martin's 'money fountain' I should then drip feed to a high interest regular saver. I plan to move £500 a month to the Yorkshire Building Society which offers 7%.

The stupid question is - if I'm taking from one account every month and adding to another, will the interest not just cancel itself out?? Or is there some benefit where I will somehow get two lots of interest which in total will be more than just leaving it with ICIC??

The drip feed reason would be because you can't put a whole chunk in to start. Otherwise, you'd stick all your savings in the highest paying account from day 1. The ybs doesn't allow more than £500 p.m. (I think).

As long as you're happy with the restrictions of the regular savings accounts, it makes sense to have your cash where it's earning the most interest. You may lose some interest on the actual transfer time, if the cash is in limbo. You won't get paid two lots at once, unfortunately.

ED

Free same-day transfers have been promised to be adopted by most or all banks, etc, starting around November. However, not much has been mentioned of this during the period so many banks have felt compelled to reimburse thousands of customers who were charged apparently excessive fees for going overdrawn. Let's hope the banks don't try to claw back extra profits by delaying same-day BACS (and hence Standing Orders).

Personally, I would favour a compromise - 1-day @ nil interest for each BACS, instead of the current standard ''2 banking days'' (sometimes 3 days, eg from Alliance + Leicester).

keren29 - re your specific interest in the Yorkshire Bdg Soc 'Regular Saver', last year I proposed the Society enable RS account holders to make monthly deposits over-the-counter or alternatively via Internal Transfer from some kind of new account offering a competitive rate perhaps on the proviso it was limited to ''1 withdrawal per month''.


5.89% gross is offered by ICICI for the account you referred to - Annual Equivalent Rate (AER) of 6.05%.