5% Savings Loophole

Eco_Miser

You won't pay tax on any bank account. You will pay tax on £200 by adjustment of your PAYE code, or by Self Assessment.

Golfish

Thanks for the swift reply Eco Miser,


Based on your info then I will not have to worry about declaring multiple amounts of small monthly interest payments as it will be my PAYE code that will automatically be adjusted (a small amount obviously).

bigadaj

Golfish wrote: »

Thanks for the swift reply Eco Miser,


Based on your info then I will not have to worry about declaring multiple amounts of small monthly interest payments as it will be my PAYE code that will automatically be adjusted (a small amount obviously).

Yea but you'll have to declare your total interest from all accounts to hmrc, which could be by self assessment or simple notification if your tax affairs are otherwise simple. They should then give you the option to pay be paye, which will mean they'll simply avoid your tax code for your employer to deduct it, or by separate payment by debit card, cheque etc.

masonic

YorkshireBoy wrote: »

I can imagine problems with later switches (eg for incentives), so if cards have a "please activate" sticker attached I activate them, even for current accounts used purely for savings.

Do any banks still ask you to phone them to "activate" a new card? I've opened new accounts with most of them in the last couple of years and haven't been asked by any. Wasn't it just a ploy to mis-sell PPI?

YorkshireBoy

masonic wrote: »

Do any banks still ask you to phone them to "activate" a new card? I've opened new accounts with most of them in the last couple of years and haven't been asked by any.

Don't remember if any ask you to phone these days. Even if they do I suspect it will be an automated service. RBS* certainly asked me to activate a debit card earlier this year, although not by phone. The only options were text, online, post, or branch!

Wasn't it just a ploy to mis-sell PPI?

Bearing in mind RBS don't now have a phone option I'd have to agree with you.

I remember in years gone by, some banks even outsourced their activation lines to CPP!


* And so presumably also NatWest & Ulster?

bobobski

bigadaj wrote: »

Not interested in the 5% cashback then?

No not right now, partly because I'm trying to use it strictly as a savings account and not as a current account. But the point was to answer the question as to whether you need to activate it, regardless of whether you should do so.

colsten

bobobski wrote: »

No not right now, partly because I'm trying to use it strictly as a savings account

You could just spend £100 on the TSB debit card, and as soon as it's debited on your account, which usually takes a day or two, transfer money from your usual current account. That's what I do, as it's £60 a year.

bobobski

colsten wrote: »

You could just spend £100 on the TSB debit card, and as soon as it's debited on your account, which usually takes a day or two, transfer money from your usual current account. That's what I do, as it's £60 a year.

Thanks, I'll look into it. I'm very new to all this money saving business so always appreciate new tricks

Maximum_Saving

I am a single person as I am divorced so I can't have a joint account. I have a bank account with First Direct.With them I have a regular saver that pays 6 percent interest. I pay £300 a month into it. When it ends it is difficult to find another bank that has very high interest. Therefore I opended a bank account with TSB and they pay 5 percent interest on up to £2000. I am putting £250 a month of that money into a TSB monthly saver also at 5 percent interest.

More than two years ago I had a Nationwide bank account. I stopped paying in £1000 a month when the 5 percent interest ended. I still keep the account with a very low amount in so I can easily do mortgage overpayments. I am not happy to pay in £1000 a month to get 1 percent interest. When it is late November 2016 I might look into getting a Nationwide regular saver for 5 percent interest.

YorkshireBoy

Maximum_Saving wrote: »

More than two years ago I had a Nationwide bank account. I stopped paying in £1000 a month when the 5 percent interest ended. I still keep the account with a very low amount in so I can easily do mortgage overpayments. I am not happy to pay in £1000 a month to get 1 percent interest.

Hopefully you downgraded the account when you decided it was no longer useful, thereby resetting the 12 month wait clock?