5% Savings Loophole

Archi_Bald

colmax wrote: »

I don't have many direct debits as my bills are included. But I would like to do this. I have a couple of credit cards. If I set up direct debits to pay them off each month and then just spent a few quid on the credit cards each month would that count for the rules?

Yes it would but you might want to search the forum for Tesco savings accounts.

fairyfairy

shawd04 wrote: »

Hi guys, i'm fairly new to this game as it can be quite faffy setting up everything. Just have a quick question though.

For example with the TSB, the 5% interest is paid on a maximum of 2000 pounds.

So if the balance ever exceeds 2000, even for a day, would this result in me totally losing the interest for that month?

Or is it easier to transfer OUT the 500 and put the next 500 IN the day after? I imagine the difference interest would be tiny.

If anyone has any experience of this, I would be eager to know.
Thanks.

Hello


Having read through this thread, I still find myself in need of advice. I have a TSB Classic Plus account & it's 'full' in it's credit interest at this point.


So right now I really need to open a high % savings interest account with TSB. Which is best recommended? Being a single person, a joint account it is not suitable. It was suggested to me at the branch somewhat wrongly in relation to expanding to a savings account with them....I feeling really lost and in need of some assistance with this, please.

bowlhead99

fairyfairy wrote: »

Having read through this thread, I still find myself in need of advice. I have a TSB Classic Plus account & it's 'full' in it's credit interest at this point.

This thread is about the article on the main site: http://www.moneysavingexpert.com/savings/savings-loophole which explains with a table how you can get high interest rates on current accounts at 7 major banks, and how these rates on the current accounts are higher than the rates on any 'savings' accounts.

If you have 'filled up' one of the good current accounts at one of the banks, and you don't qualify to have a second good current account with that bank - because for example you chose TSB and they only allow you to have a second good current account with them if it's a joint one, but you don't have a partner - then you simply go and get an account with one of the other banks on the link.

So right now I really need to open a high % savings interest account with TSB. Which is best recommended?

TSB don't really have any high interest 'savings' accounts; so after filling the high interest current account(s) at TSB, your next destination should be a high interest current account elsewhere, at another bank, if you can be bothered, otherwise you will have to accept a much lower rate at TSB.

Being a single person, a joint account it is not suitable. It was suggested to me at the branch somewhat wrongly in relation to expanding to a savings account with them....

The person in your TSB branch probably told you that the best thing with their bank after getting one current account with them, is getting another current account with them - if you have someone to do a joint one with - otherwise a normal savings account, which pays less. They told you the truth. So, it's time to get an account with another bank.

I feeling really lost and in need of some assistance with this, please.

You say you've read through the thread? So, start again and after a few posts you'll see people talking about all the accounts they have with all the different banks and what rates they pay. Or read the article. And then pick an account, and go and open one?

What is the best account next for your circumstances depends on how much you can save and how quickly. If you are only saving £200 a month, you could use a Nationwide account that pays 5% on anything in it for the first year of having the account. However if you're saving £2000 a month, the Nationwide account is not much use because it'll be 'full' after about a month and you should perhaps get the Santander account which pays interest all the way up to £20,000. If you only have a small amount of money, the Santander is less useful because it only pays 3% (instead of 5% with Nationwide) and you only get that rate once you've got £3000 with them.

So, re read the thread or just read the article linked in the first post and decide what is best for what you think you will be able to save.

nfs_daemon

In the 5% savings loophole article it says:

• Ongoing: Repeat these steps once per month to maintain the gain.

Surely the whole point of setting up standing orders is that you don't have to repeat steps once per month - once they are set up you just leave them to run automagically.

nfs_daemon

Another thing about that article which I find confusing is:

So let's imagine you want to open three with Bank of Scotland, two Nationwide FlexDirect*, two Tesco Bank and two TSB Classic Plus* accounts to earn over 4% on up to £15,000.

3 x BoS = 3 x £5,000 = £15,000
2 x NW = 2 x £2,500 = £5,000
2 x Tesco = 2 x £3,000 = £6,000
2 x TSB = 2 x £2000 =£4,000

Total = £30,000. Not £15,000.

Eco_Miser

nfs_daemon wrote: »

In the 5% savings loophole article it says:

• Ongoing: Repeat these steps once per month to maintain the gain.

Surely the whole point of setting up standing orders is that you don't have to repeat steps once per month - once they are set up you just leave them to run automagically.

You're right, the process is repeated automatically. I suspect the article has been edited, and that bit is left over from the earlier version.

BTW, since Tesco process SOs on a weekend, but other banks don't, at some stage money will be leaving Tesco before the SO into Tesco happens. Expensive if the normal balance doesn't cover it.

That whole Standing Orders over 9 days thing strikes me as over-complicated. I run £1000 +interest round the accounts by Faster Payment on one day, and top up the Club Lloyds with another £500 when I get paid.

nfs_daemon wrote: »

Another thing about that article which I find confusing is:

So let's imagine you want to open three with Bank of Scotland, two Nationwide FlexDirect*, two Tesco Bank and two TSB Classic Plus* accounts to earn over 4% on up to £15,000.

3 x BoS = 3 x £5,000 = £15,000
2 x NW = 2 x £2,500 = £5,000
2 x Tesco = 2 x £3,000 = £6,000
2 x TSB = 2 x £2000 =£4,000

Total = £30,000. Not £15,000.

Again, there's been editing and someone's edited it wrong (BOS wasn't in there at first).

colsten

nfs_daemon wrote: »

3 x BoS = 3 x £5,000 = £15,000
2 x NW = 2 x £2,500 = £5,000
2 x Tesco = 2 x £3,000 = £6,000
2 x TSB = 2 x £2000 =£4,000

I haven't checked the article but that list seems to be a mixture of sole and joint accounts. You can presently apply for 3 sole BOS and 2 sole Tescos, but you can only apply for 1 sole Nationwide FlexDirect that pays 5% (additional ones pay 1%), and TSB have reduced the number of sole Plus accounts for new applicants to 1.

fairyfairy

bowlhead99 wrote: »

This thread is about the article on the main site: http://www.moneysavingexpert.com/savings/savings-loophole which explains with a table how you can get high interest rates on current accounts at 7 major banks, and how these rates on the current accounts are higher than the rates on any 'savings' accounts.

If you have 'filled up' one of the good current accounts at one of the banks, and you don't qualify to have a second good current account with that bank - because for example you chose TSB and they only allow you to have a second good current account with them if it's a joint one, but you don't have a partner - then you simply go and get an account with one of the other banks on the link.

TSB don't really have any high interest 'savings' accounts; so after filling the high interest current account(s) at TSB, your next destination should be a high interest current account elsewhere, at another bank, if you can be bothered, otherwise you will have to accept a much lower rate at TSB.
The person in your TSB branch probably told you that the best thing with their bank after getting one current account with them, is getting another current account with them - if you have someone to do a joint one with - otherwise a normal savings account, which pays less. They told you the truth. So, it's time to get an account with another bank.
You say you've read through the thread? So, start again and after a few posts you'll see people talking about all the accounts they have with all the different banks and what rates they pay. Or read the article. And then pick an account, and go and open one?

What is the best account next for your circumstances depends on how much you can save and how quickly. If you are only saving £200 a month, you could use a Nationwide account that pays 5% on anything in it for the first year of having the account. However if you're saving £2000 a month, the Nationwide account is not much use because it'll be 'full' after about a month and you should perhaps get the Santander account which pays interest all the way up to £20,000. If you only have a small amount of money, the Santander is less useful because it only pays 3% (instead of 5% with Nationwide) and you only get that rate once you've got £3000 with them.

So, re read the thread or just read the article linked in the first post and decide what is best for what you think you will be able to save.

Thank you for your in-depth response.


I have an appt. at Nationwide to open the 'felexdirect'.
have also been reading more up on this and am just wondering why isn't the M&S Current account not mentioned in the list?


Personally, the dilemma is which should I choose and I'm sliding with M&S....? has anyone have a current account w/ them? Advice/experiences?

Archi_Bald

fairyfairy wrote: »

Thank you for your in-depth response.


I have an appt. at Nationwide to open the 'felexdirect'.
have also been reading more up on this and am just wondering why isn't the M&S Current account not mentioned in the list?


Personally, the dilemma is which should I choose and I'm sliding with M&S....? has anyone have a current account w/ them? Advice/experiences?

You can open the FlexDirect online, no need to go in Branch.

The M&S current account pays no interest, that's why it is not mentioned here. Lots of people do have a current account with them for their 6% regular saver account, and only for their regular savings account (£250/mth max). You can hold an M&S current account alongside a FlexDirect, it doesn't have to be either or.

YorkshireBoy

fairyfairy wrote: »

Thank you for your in-depth response.


I have an appt. at Nationwide to open the 'felexdirect'.
have also been reading more up on this and am just wondering why isn't the M&S Current account not mentioned in the list?


Personally, the dilemma is which should I choose and I'm sliding with M&S....? has anyone have a current account w/ them? Advice/experiences?

This thread is about high interest current accounts.

The "in-depth response" you've thanked bowlhead99 for included a link to the original article about high interest current accounts.

You say you've been "reading more up on this". So, how high is the interest on the M&S current account?