How to maximise savings HELP

oneconfusedgirl

Looking for advice fromanyone who knows a little about maximising savings.

Current savings: £2100(not currently earning interest)

Future monthly savings:£500/month

I think I’ve worked outthe best option for current savings is to drip-feed it into First Directs6% Regular Saver 12 month account (Monthly deposit requirement £25-£300). So drip feed plan works out: £300 first 6months, £175 for 7th month, then £25 last 5 months.

However, unsure ofthe best option for future £500/month savings, to maximise interest.

Considered opening oneof the top current account savings interest (mentioned in this weeks MSEemail). The problem is Santander wins for big savers £3000+, whereas TSB (- £2000)and Lloyds (£4000-£5000) win for smaller savers.

So saving £500/monthmeans TSB would only be good for interest for 4 months, or alternatively goingwith Santander, we wouldn’t benefit any interest for 6 months.

Worried to make toomany applications because each one makes a credit search that can hit credit score.

So unsure of thebest way to maximise interest on future savings? Any ideas from savvysavers would be really welcomed.

jimjames

You can get £6500 into 5% accounts so that gives you a fair bit of flexibility. Put the lump sum in and you can then use £500 put into reg saver

YorkshireBoy

jimjames wrote: »

You can get £6500 into 5% accounts

OP makes 4 references to "we" and "we're", so there's scope for £8,000 (and maybe even £12,000) with TSB alone. No need to look anywhere else, or mess around with 3 accounts at First Direct, for at least a year on their numbers.

oneconfusedgirl

Sorry I shouldn't have used the term "we", "we're" etc (I will edit now). It's my partners savings, of which I'm trying to help him maximise. I'm not in a position to be applying for anything at the moment.

So if its only him saving, how does that effect it?

oneconfusedgirl

jimjames wrote: »

You can get £6500 into 5% accounts so that gives you a fair bit of flexibility. Put the lump sum in and you can then use £500 put into reg saver

Sorry could you explain what you mean? Apologies, maybe I've been looking at this all too long lol

bsms1147

The TSB Classic Plus current account pays 5% on £2,000 and your husband can have two of them. Nationwide FlexDirect current account pays 5% (for a year) on £2,500. That's £6,500 earning 5% across those accounts there.

If applying as a couple you can have up to six of the former and three of the latter, covering £19,500 at 5%.

There are threads for each of the accounts on the Bank Accounts board.

Santander wins for big savers £3000+

I disagree. One could argue that even on your own - so no joint accounts - Santander doesn't really 'win' until you reach about £11,500+ in savings.

YorkshireBoy

oneconfusedgirl wrote: »

So if its only him saving, how does that effect it?

2 x TSB Plus paying 5% AER on up to £2K each.


1 x Nationwide FlexDirect paying 5% AER on up to £2.5K but for only 12 months.


Which makes up the £6.5K mentioned by jimjames above.


You say you're "partners". Are you financially associated, settled, etc? If so, he could save some in your name and get 5% AER on the £8-12K I mentioned above with TSB. You could also, between you, get 5% AER on another £7.5K at Nationwide.


So it's a long time before you need to start looking at other options.

YorkshireBoy

oneconfusedgirl wrote: »

Sorry could you explain what you mean? Apologies, maybe I've been looking at this all too long lol

Answering on jimjames' behalf here, but what he's saying is what I said above...fill up your 5% accounts before starting with regular savers.

oneconfusedgirl

Ok I think I understand.

However, if he's saving £500/month (£6000 per year), that money will be going into the 2 x TSB and 1 x Nationwide accounts.

So that still leaves the £2100 he already has saved. That's where I referenced using the 6% First Direct Regular Savers Account, to drip-feed the lump sum into. Plus it's a higher interest rate than the TSB and Nationwide accounts, no? Or am I thinking along the wrong lines?

Not arguing any points, I'm clueless lol, just genuinely trying to understand the best way

Lomcevak

oneconfusedgirl wrote: »

However, if he's saving £500/month (£6000 per year), that money will be going into the 2 x TSB and 1 x Nationwide accounts.

So that still leaves the £2100 he already has saved. That's where I referenced using the 6% First Direct Regular Savers Account, to drip-feed the lump sum into. Plus it's a higher interest rate than the TSB and Nationwide accounts, no? Or am I thinking along the wrong lines?

I think it's the wrong way round - use two TSB accounts for the £2100 you have now, and (if you're dead set on FD) then use a FD regular saver for £300 of the £500 you are saving in the future - use the TSB accounts for the remaining £200 a month until you have both topped up to £2k, then start opening more accounts

If you have a couple of DDs that can be moved then cycling funds through a Halifax reward along with the TSBs would give you another £5 a month too. Not massive, but it all adds up

Only things to be aware of with FD are the funding requirements (£1000 a month in) and that you get no interest on the current account balance - you can't just have a regular saver. You don't want much money sitting there earning nothing, so need to schedule a move-in, move-out to meet funding requirements and fund the regular saver. Also when the regular saver ends the account becomes a saver at low interest so you need to remember to move that out and start a new regular saver in 12 months time.

That's all fine if you're very organized about your finances (it isn't much work once you're used to it), if you have any doubts or may forget once in a while i'd forget the regular saver and stick with 5% accounts - the Lloyds 4% is useful too, although you need to be slightly more careful as the funding requirement is slightly different to the TSBs and DDs are required.

Worried to make toomany applications because each one makes a credit search that can hit credit score.

I think the general view is that current accounts without overdraft facilities are minimal impact to credit score; many of us here have lots of these accounts (more than 20 in some cases).

jimjames

Couldn't have put it better lomcevak.

There's no point trying yo use you existing money to fund a regular saver when you also have more than enough monthly income for it.

At the end of year 1 you'll need to find a new home for the reg saver money too.