£4k savings. What is the best rate account I should open?

kteara

As title says I have 4k in savings. I only earn £200-300 a month so I can't open the 5% interest TSB account. With the appaling ISA rates this year I'm unsure where to sign up with? I am with barclays atm.

thank you for your help

jimjames

There is no reason why you can't use the TSB account.

The rules are that you need to pay in a certain amount of money. It doesn't have to be your wages. So you can transfer £1000 from another account into it, transfer it back immediately.

There is a good post by innovate on this thread that explains more about it

https://forums.moneysavingexpert.com/discussion/comment/65155238#Comment_65155238

badger09

jimjames wrote: »

There is no reason why you can't use the TSB account.

The rules are that you need to pay in a certain amount of money. It doesn't have to be your wages. So you can transfer £1000 from another account into it, transfer it back immediately.

There is a good post by innovate on this thread that explains more about it

https://forums.moneysavingexpert.com/discussion/comment/65155238#Comment_65155238

In theory, you're right, but unless OP has other income, I think he/she might find it difficult to open a current account with earnings of only £200 - £300 per month .

kteara

Won't I get a lower interest if I keep sending £500 back and forth between accounts every month ? Am I even aloud to do that or do I have to keep the £500 in every time I transfer (each month).

As a second option, would you recommend the Santander 2 Year fixed ISA ?

jimjames

It doesn't affect the interest paid by transferring money back and forth.

On day 1 of the month you transfer from Halifax to Nationwide/TSB.

Later that same day you move the money back to Halifax.

Balance is the same in your account at the end of that day.

Only you can check the ISA rates so that's your choice but given your income I assume you are not a taxpayer anyway so an ISA is pointless.

kteara

jimjames wrote: »

It doesn't affect the interest paid by transferring money back and forth.

On day 1 of the month you transfer from Halifax to Nationwide/TSB.

Later that same day you move the money back to Halifax.

Balance is the same in your account at the end of that day.

Only you can check the ISA rates so that's your choice but given your income I assume you are not a taxpayer anyway so an ISA is pointless.

I'm unsure what accounts to open apart from the 5% TSB one. I heard Lloyds club account gives you 4% up to £5,000... wouldn't this be better for me? And wouldn't a santander account give me more interest than a halifax one?

Also I only have one direct debit to my gym membership. it says I need two so what should I do?

sorry, just really confused. Appreciate your help.

YorkshireBoy

kteara wrote: »

sorry, just really confused.

It's really very simple.
Open 2 TSB Plus accounts
Fund each with £2,000
Set up monthly standing orders (from 1>2 and from 2>1) for £500 each
Ensure you're set up for paperless statements
Sit back and concentrate on your studies, whilst you maximise your interest


You can't have any more questions now...surely!? And if you do have some, they're bound to have already been answered countless times over the last week on the existing TSB threads.


If you're declined the TSB accounts, come back for a plan B.

badger09

badger09 wrote: »

In theory, you're right, but unless OP has other income, I think he/she might find it difficult to open a current account with earnings of only £200 - £300 per month .

I would be really interested (sorry ) to hear OP's decision regarding Lloyds/Santander/TSB etc current accounts, & which, if any, he/she manages to open.

jimjames

kteara wrote: »

I'm unsure what accounts to open apart from the 5% TSB one. I heard Lloyds club account gives you 4% up to £5,000... wouldn't this be better for me?.

I can't understand why it would be better for you - it pays a lower rate? Can you explain your thinking?

If the only money you have is the £4000 then you don't need to overcomplicate it. £2000 TSB and £2000 Nationwide would do it.

kteara

Hello everyone,

thanks for your patience with my questions lol. to answer @badger09 's question. I will be opening three accounts. two TSB accounts and one Halifax account which gives me £100 for switching and £5 interest every month, providing I deposit £750 each month too. I will be going into these brances on Monday to get more information and open these accounts but If I can't open 2 TSB accounts then Ill just stick with 1 TSB and 1 Halifax.

I'm unsure whether you can open two TSB accounts as a single person, I heard it needs to be joint if you're opening a second one but I shall find out.

kteara

jimjames wrote: »

I can't understand why it would be better for you - it pays a lower rate? Can you explain your thinking?

If the only money you have is the £4000 then you don't need to overcomplicate it. £2000 TSB and £2000 Nationwide would do it.

Ok so everyone is agreed to put atleast £2000 in TSB but why should the rest be in Nationwide if I can open a second TSB account according to everyone on here? surely the TSB account gives higher interest than the Nationwide account right?

Also, If I'm unable to open a 2nd TSB account... Wouldn't halifax Reward Current Account be still a better option than nationwide or not?

Halifax Reward Current Account gives me £100 for switching and £5 a month interest for every month I deposit £750.