Best savings account for £4000+ ?

chris9393

Hi everyone

I've been lurking around these forums for a while now slowly taking in alot of useful information. I currently have around £4000 worth of savings and I'm trying to put away a maximum of £500 per month to keep adding to it.

For this reason I will be adding payments in monthly but will also need easy access to the account as I will most probably be spending the money within the next couple years as I am saving for a mortage. Therefor an ISA might not be the best account for me?

From what I've read a Santander 123 or the new TSB 5% interest account will be the best option for me to get the best interest out of my savings.

Before I open a new account I would just like to hear your guys opinions on what the best option will be for myself to get the best out of my savings.

Many Thanks

innovate

The TSB 5% account will accommodate £4,000 because you will be allowed 2 accounts with £2,000 max. You'll need to find elsewhere for your monthly £500s if you want interest on them.

ColdIron

The 123 would be best if you can transfer DDs for the cashback to pay the monthly fee and £20K should keep you going for a while. The TSB 5% will limit you immediately to £4K even if you open 2 accounts. Other than that the Lloyds/BoS Vantage and TSB Enhance may suffice if you can get them soon enough. I'm sure you will have read about them here

chris9393

Thank you for the replies. Just a quick question, how many bank accounts am I allowed to have? I'm currently with Halifax using their Ultimate Reward Account.

What about if I open 2 TSB accounts and stick £2000 in each then leave it to collect the 5% interest. Then open a Santander 123 account and use that as my 'new' savings account? I could then set up 2 DDs from my Halifax account to the Santander account to pay the monthly fee and also gain interest on the new savings? Or am I just confusing myself here?

eskbanker

chris9393 wrote: »

Thank you for the replies. Just a quick question, how many bank accounts am I allowed to have? I'm currently with Halifax using their Ultimate Reward Account.

What about if I open 2 TSB accounts and stick £2000 in each then leave it to collect the 5% interest. Then open a Santander 123 account and use that as my 'new' savings account? I could then set up 2 DDs from my Halifax account to the Santander account to pay the monthly fee and also gain interest on the new savings? Or am I just confusing myself here?

No limit on total number of accounts, many on here are in double figures!

You'd need to transfer from Halifax to Santander by standing order or direct faster payments but won't be able to do this by direct debit. You'll need to set up two different direct debits to pay companies from your 123 to comply with the account Ts & Cs, it makes sense to use ones for which Santander pay cashback, e.g. utilities, council tax, etc.

innovate

You can have as many bank accounts as you like, within the limits each bank may set (e.g. only 3 Lloyds Vantages allowed).

The 123 only pays 3% from £3,000 onwards. You would do better with a FlexDirect to save up to £2,500 for a year. It's all on the forum.

chris9393

innovate wrote: »

You can have as many bank accounts as you like, within the limits each bank may set (e.g. only 3 Lloyds Vantages allowed).

The 123 only pays 3% from £3,000 onwards. You would do better with a FlexDirect to save up to £2,500 for a year. It's all on the forum.

Reading up on the FlexDirect account it says I need to pay in £1000 per month? Could I just set up a standing order of £1000 from my Halifax account to the FlexDirect account then simply move most of the money back into my Halifax account? I could then let the FlexDirect account slowly build up and up over the year to £2500 so I can benefit from the 5%.

Also on the side open 2 TSB accounts, stick £2000 in each then let them sit there over the year to get the 5% interest in both accounts.

Is it as simple as that or is there more to it? I'm new to all this stuff but I suppose we've got to start somewhere

innovate

Yep, you got all the general principles. Just make sure you fulfill the monthly pre-reqs for interest payment, and keep an eye on any changes in interest rate / any better offers that might creep up.

YorkshireBoy

chris9393 wrote: »

Also on the side open 2 TSB accounts, stick £2000 in each then let them sit there over the year to get the 5% 4.89% interest in both accounts.

I've corrected your error above.

Also, won't they require monthly funding, rather than just letting them "sit there"?

YorkshireBoy

ColdIron wrote: »

...TSB Enhance may suffice...

No longer available to new applicants (since late last week I believe).

chris9393

YorkshireBoy wrote: »

I've corrected your error above.

Also, won't they require monthly funding, rather than just letting them "sit there"?

Thanks! If that's the case I could just set up a standing order from my account which currently has the £4000 in to the two TSB accounts. So instead of smacking in £2000 in straight away I'll spread it out over the year?