How much buffer/savings to keep in a current account

YorkshireBoy

Wobblydeb wrote: »

I did have the Lloyds Vantage accounts, but found the ease of use (and interest rate!) eroded over time.

I opened mine for 3%, but I understand there was a time when they were paying up to 5%? I also took advantage of their 4% offer a couple of years ago. It's still 3% until July (when it drops to 1.5%).

I don't have many direct debits!

They're very easy to find, especially savings accounts which are 'set up and forget' if that's what you want.

Is there a handy thread with the best current account list?

This and the current account board are currently riddled with threads on high interest current accounts. Shouldn't be too hard to research.

Shame the £5 reward at Halifax ended - infinite interest!!

For you maybe, but I found enough DDs to continue raking in £240 a year on my 4 Reward accounts.

jackyann

Another way of dealing with an emergency is to have an agreed overdraft in place.
That's what I do, with a back-up immediate access, limited withdrawal account.

In most emergencies, I would use my credit card, but if I needed cash in a hurry, I would use my overdraft then pay it off as quickly as I could from my limited withdrawal account..

GingerFurball_2

Archi_Bald wrote: »

If you had kept your money in an interest paying current account, you could easily have got a few free all-american gigantic pizzas thrown into your holiday...but you are probably right, that would be bad for your waistline, and feeling loved by your bank could count for a lot more.

You are right, there is no guarantee that interest rates on current accounts will continue, But it's been going for several years now, and new top paying ones have only just been launched. People have made very good money from these accounts, and as and if the interest paying will stop, they would be in now worse a position than you are with your bank now.

Each to their own.

There's no guarantee that high interest current accounts will continue but with funding for lending and low interest rates I just don't see an environment where competing for savings customers becomes attractive to banks.

Whereas if a bank can get someone to start/move their current account to them, they're more likely to be able to cross-sell profitable products like loans, credit card and mortgages. Hence banks will try and outdo each other to get your current account business.

bigadaj

It's all personal choice I suppose but to me the main thing to achieve financially is a position in which you're comfortable and aren't under pressure. To me having no money in cash would be an overly stressful situation, as though you might have an overdraft or credit cards then if the issue was moderately large you might not be able to manage that from income and so incur additional costs, probably at a significantly higher rate than investments could match. Similarly a few thousand even if invested is unlikely to make a huge difference to most people's situation, certainly in terms of retirement or longer term welfare, and if it does then it's questionable whether investment is the correct option for that individual.

Thrugelmir

YorkshireBoy wrote: »

Why an ISA?...when you can (at least) double your return with current accounts.

I find it more profitable to spend my time (a) working and getting paid for it (b) managing my SIPP and the investments there in. Rather than worrying about a relatively small amount of interest.

Having a buffer makes for a stress free life. That's important as well.

innovate

This being MSE, it is a little hard to understand why people would settle for less than half the interest than they could get. The effort involved in achieving this is hardly onerous.