5% Savings Loophole

YorkshireBoy

Ian_Bruce wrote: »

My apologies, I mentioned standing orders when I should have said direct debits.

No, you mentioned direct debits when you should have said standing orders. EDIT: A further post of yours shows you're still confused. Maybe it's time to sit back and read the article again?

If your sons don't have any savings of their own, it's entirely possible to get another £101K of your cash making 3-5% AER (on top of your 'own' £50.5K (or £130.5K if you have a spouse, or anyone else you are, or are prepared to be, financially associated with).

What's in it for the kids?...20%?

Archi_Bald

Ian_Bruce wrote: »

"Some of them require you to set up direct debits (and, no, you can't usually just pay these to another of your bank accounts) which makes life difficult"

You will not be able solve DD requirements by sending money to your sons, and them sending it back to you. For the simple reason that you cannot move money between current accounts by DD.

However, the article is quite wrong to say DDs make life difficult. You can set up any number of DDs with charities, for magazine subscriptions, memberships etc, and you might even find a savings account or two, in your own name, that allows DDs.

I think you need to do a lot more reading, and specifically on the forum, not in the article.

djphatic

I am just in the process of setting this all up. I currently have the following accounts setup with the maximum value for highest possible rates:

Santander 123
TSB Classic Plus
Club Lloyds
Bank of Scotland

Ignoring the direct debit requirements am I correct in thinking that I can setup Standing Orders from these accounts to all occur on the same date so that they all pay each other to reach the limit and effectively start and end with the same balance on that date?

Example:
Club Lloyds pays Bank of Scotland £1000
Club Lloyds pays TSB Classic Plus £500
Club Lloyds pays Santander 123 £500
Bank of Scotland pays Club Lloyds £1000
TSB Classic Plus pays Club Lloyds £500
Santander 123 pays Club Lloyds £500 (for purpose of same balance)

Or is it better to leave a day between each standing order using additional funding which goes back into my daily/usual current account?

Archi_Bald

That's exactly the same concept I use, and my SOs are all going in and out on the same day for all of them.

As a by-the-by, I use a 123 as the central hub rather than the Club Lloyds, as my total for the monthly deposits is more than £5,000.

Cougargb

This is all fascinating and slightly terrifying! I am 72 and about to do this for the first time, so a bit of hand holding is required from you experienced members!

The sequence I might go for requires creating/setting up 7 accounts ..

3x Bank of Scotland
2x TSB
2x Nationwide Flexi

1. Without going into the application process further, how easy is it to create more than one account in each bank
2. How likely will I be able to set all these accounts in a few days
3. What happens if I'm restricted to say getting 5 out of the 8
4. Will the record on my credit activity prevent me from opening new accounts after a year to replace the Flexi Accounts?

Just so scary!

Eco_Miser

Cougargb wrote: »

The sequence I might go for requires creating/setting up 7 accounts ..

3x Bank of Scotland
2x TSB
2x Nationwide Flexi

It's no longer possible for one person to get two sole accounts with TSB or Nationwide. If there's two of you, get three accounts between you (1 joint, 1 sole each). Don't forget Lloyds.

Cougargb wrote: »

1. Without going into the application process further, how easy is it to create more than one account in each bank

Reports vary, mostly easy, joint accounts may require a branch visit.

Cougargb wrote: »

2. How likely will I be able to set all these accounts in a few days

Loads of info trickles through by post (for security reasons), so while accounts may be open, they may take a week or so before they are fully usable.

Cougargb wrote: »

3. What happens if I'm restricted to say getting 5 out of the 8

fall back to plan B.

Cougargb wrote: »

4. Will the record on my credit activity prevent me from opening new accounts after a year to replace the Flexi Accounts?

No

Cougargb wrote: »

Just so scary!

Yes.
Take it slowly, read the Terms & Conditions, triple check what you type.

Also note you can get even more interest by feeding Regular Savers at 5% such as from TSB and Nationwide (and 6% and 4%) from accounts paying 3%.

Cougargb

Thank you Eco Miser for taking the time to reply so comprehensively. I will take note and proceed carefully!

jacschaps

Does this 5% loophole still work? I'd like to try it, but it seems so complicated. Any advice??

colsten

jacschaps wrote: »

Does this 5% loophole still work? I'd like to try it, but it seems so complicated. Any advice??

What is complicated? How much spare money have you got, where is your money now and what would you like to do with it?

enthusiasticsaver

jacschaps wrote: »

Does this 5% loophole still work? I'd like to try it, but it seems so complicated. Any advice??

Yes it still works. I now have the grand total of 8 current accounts and 4 regular saver accounts all paying between 3% and 6%. That is a lot less than some others still. I would say think about your strategy and open the accounts a few at a time depending on how much you have to cycle through the various accounts and start at the top -- ie those paying 5% and 6% and work down to those paying 3 and 4%.


I just had 2 Santander 123s initially then opened TSB and Nationwide accounts with regular savers, then moved on to Lloyds Club, First Direct, Bank of Scotland and Tesco. Also look for switching bonus opportunities. Set up the monthly payments by standing orders.