5% Savings Loophole

YorkshireBoy

hushpuppy wrote: »

Yes most certainly.

3 Nationwide FlexDirect accounts (one sole each plus a joint), paying 5% AER (for 12 months only) on a total of £7.5K...£366.75/year

Same again with TSB Plus, this time on a total of £6K...£293.40/year

One Club Lloyds, paying 4% AER on £5K...£196.50/year

The above will take £18.5K, and return £856.65/year

Opening regular savers* with the above providers (same interest rate as current accounts) will take the other £1,500...and any other savings from income...and any ISA cash you pull out...when you realise how much more you can make!


* As there are 2 of you, they will take £2,300 a month...paying 4-5%. How much is the ISA paying?...a 1/4 of this?

hushpuppy

Well, I haven't sent the money off yet for the next years ISA so, given the interest rates of ISA V these accounts, I'm now wondering if I should put into this system?

If so, and that means I have another @£15k to play wit, would you suggest i put into a Santander 123 to get the 3%?

YorkshireBoy

hushpuppy wrote: »

If so, and that means I have another @£15k to play wit, would you suggest i put into a Santander 123 to get the 3%?

Santander would be bottom of my list, after first opening (as a couple)...

3 x FlexDirect
3 x TSB Plus
3 x Club Lloyds
6 x BoS Vantage
4 x Tesco

All of which will take £70.5K, paying 3-5% AER.

And then of course there's all the regular savers I mentioned earlier, fed from income and drip-fed from Tesco & BoS (paying 3% AER) into 4-5% accounts. As I said earlier, they will take £2,300 a month.

Santander might make life easier, but won't make you as much money.

hushpuppy

One more (hopefully last, but maybe still a stupid question, so sorry in advance).

In order to get the maximum % from each account, do I have to pay in the minimum amount every month for the whole 12 months, or just until I achieve the maximum amounts each account pays the maximum % up to?

In other words can I in month 1 open a Flex account each, with £2500 and then not have to worry about putting more in as I'll get the 5%?

Same for the other accounts (notwithstanding any DD obligations?)

YorkshireBoy

hushpuppy wrote: »

One more (hopefully last, but maybe still a stupid question, so sorry in advance).

In order to get the maximum % from each account, do I have to pay in the minimum amount every month for the whole 12 months, or just until I achieve the maximum amounts each account pays the maximum % up to?

In other words can I in month 1 open a Flex account each, with £2500 and then not have to worry about putting more in as I'll get the 5%?

Same for the other accounts (notwithstanding any DD obligations?)

Answered on their respective websites...some you can, some you can't.

hushpuppy

YorkshireBoy wrote: »

Answered on their respective websites...some you can, some you can't.

Thanks, I'll have a look, but it does somewhat bring me back to my original question!

Lingua

hushpuppy wrote: »

Thanks, I'll have a look, but it does somewhat bring me back to my original question!

hushpuppy wrote: »

One more (hopefully last, but maybe still a stupid question, so sorry in advance).

In order to get the maximum % from each account, do I have to pay in the minimum amount every month for the whole 12 months, or just until I achieve the maximum amounts each account pays the maximum % up to?

In other words can I in month 1 open a Flex account each, with £2500 and then not have to worry about putting more in as I'll get the 5%?

Same for the other accounts (notwithstanding any DD obligations?)

With Nationwide, you have to have £1000 going through a month. So, you can set up a ring of payments between your various accounts. e.g. £1000 from Nationwide to TSB, then back again. Internal transfers do not count, so you can't do the following:

Nationwide (sole)
Nationwide (joint)
TSB (sole)
TSB (joint)

It would need to be something along the lines of:

Nationwide (sole)
TSB (sole)
Nationwide (sole 2)
TSB (sole 2)
Nationwide (joint)
TSB (joint)
Other accounts etc.

Having all of these go out on the same day means your accounts, as long as they all have more than £1000 in them, will never be overdrawn and will always have the same amount of money in them for interest purposes, so you get the maximum interest.

EDIT: For interest, you have to have the minimum going through a month. If you don't, you won't get the interest for that month.


Lingua

Eco_Miser

hushpuppy wrote: »

In order to get the maximum % from each account, do I have to pay in the minimum amount every month for the whole 12 months, or just until I achieve the maximum amounts each account pays the maximum % up to?

Yes, every month.

Note that for at least one account the minimum is £0.

Sensibly, you will pay in the maximum on which interest is paid on opening the account, then move the monthly minimum in and out on the same day (allowing for collecting interest, paying DDs, SOs to savers, etc).

Of the current accounts, only Nationwide has a 12 month limit, the others continue until the bank decides they have enough customers, or changes marketing strategy.

All the accounts YorkshireBoy mentioned and more are listed in a single post here

You have a First Direct account - they have a 6% regular saver considered so good that many here have opened an FD current account just to get the RS.

hushpuppy

Thanks both, and I wasn't aware of the FD saver that's a great help.

Melanie667

Hello,

Will opening a bank account with no overfdraft facility leave a mark on my credit file?

On another MSE thread on account switching (can't link as new user) it says:

It can have an impact in the short term – especially if you're rejected, or you've tried to open a number of accounts in a short space of time – although for most, this shouldn't be an issue.
But if you're about to make a serious credit application, for example a mortgage, switch after that.

This is because applying for a new account requires a credit check for the overdraft, which leaves a footprint on your file, and the fact you've got a long relationship (providing it's good) is a positive. So switch, and this takes a little while to rebuild. See our Boost Your Credit Rating guide for more help.


So it sounds like the mark on the credit file happens due to the overdraft. However, anywhere else it implies that just opening a bank account affect my credit score.


I already had a LLoyds Club account (it is my main account and has an overdraft facility on it, I had my only main account with Lloyds for 10 years) so I can save £ 5000 on this.



Yesterday I opened a Santander 123 to stash £20 000 savings. On the form I selected '2nd bank account' and 'no overdraft needed' and it got accepted automatically. I do intend to get a mortgage in the near to medium future (the savings are for deposit) but I decided to take the risk for Santander 123 because it enabled me to stash a large chunk of savings (that used to be in NSI income bonds), I only have my old Lloyds account and no credit card or loan at all, earliest I can apply for a mortgage is July (need salary history after pay rise) and there's no guarantee I'll find a flat that soon anyway, so I thought priority was to get a good rate for £20 000 right now. I can split my direct debits between Santander and Lloyds and meet the criteria.



However I have another £ 10 000 for the NSI bonds to store somewhere. obviously it's tempting to open 1 x TSB and 1x Nationwide Flex to get 5% on £ 4500, but that's 2 applications for a chunk of £4500 so I'm concerned it's not worth the risk on my credit file compared to the Santander.


Does someone knows for sure whether a hard credit search is done for opening a bank account with no overdraft, or just for the overdraft?


Many thanks for your help.


Mel.