Financial Advice (Savings)

Mjkpio

Hi all, sorry for the long post!

I'm hoping for a bit of free financial advice! Cheeky I know, but you're the ones with the real world knowledge and honest/un-biased views.

My financial situation is positive and I am able to put money into savings. I am currently saving towards a deposit for a house (renting atm) so don't want to do anything that could damage my financial position with potential mortgage lenders etc.

I currently use a Nationwide Flex (NWFlex) current account that I've had for 12years, a Santander 123 (S123) for bills & savings and a S123 Credit Card (CC) for petrol, food and work expenses.

Each account's benefits:

• NWFlex - pay in £750pcm and get annual travel insurance (also been my main account since I was ~14, good for financial stability).
• S123 - 3% CB on savings over £3k. 1-3% CB on household bills. Plus S123 Credit Card for Petrol (3% CB) and Shopping (1% CB).
• First Direct (FD) - £125 cash on switching over, must pay in £1000pcm min. Plus 6% regular saver (FDRS) on £25-300pcm. FD rated as #1 in customer polls.

My idea is to switch from my NWFlex to the FD as my main current account and claim the £125 switching bonus (must switch before 31st July). Use the FDRS for some savings (though that gets tied in for 12 months) and feed the rest back into the S123 account for bills and savings. It would mean losing the travel insurance from NWFlex, but that can be bought for only a few quid anyway!

Here's my plan using rough/not accurate figures:

£2500 (Salary into FD)
£300 (into FDRS 6% - no access for 12 months)
£1000 (into S123 for bills)
£700 (into S123 for savings - have full access)

I guess my worries are:

• Leaving the one bank I've been with for the longest, not that I get a good interest rate or anything! (i.e. from MSE "A word of warning: if you have one old credit card, and several new ones, don't close down the old one. Lenders like you to have long financial relationships - it shows that you have stable finances. Close the long-held card and you'll take a credit score hit.")
• Tying up £300pcm for 12 months (if you withdraw before the 6% drops to 0.5% and the account is closed!)
• Complications of where money is when!
• Change!

So should I switch from NW to FD to claim the £125 bonus and tie in £300pcm for 6% interest? Should I in fact ignore all of these cashback savings accounts and putting it all into a NewISA?

I have also just taken out the S123 CC to use for petrol, shopping & expenses - should I now cancel or keep my unused Nationwide CC?

Any and all advice welcome. With so many options and so much MSE advice out there (which I have read!) I'm struggling to work out what's best! Many thanks in advance.

TLDR; Do I switch from my long term Nationwide Flex account to First Direct? Do I split savings between the First Direct Regular Saver and the Santander 123 accounts? Should I be using a NISA instead? Should I cancel my old credit card now I have a new S123 credit card?

Eco_Miser

Forget about cash (N)ISAs until the rates get much better. Look at NW FlexDirect (5%), TSB Plus (5%), Lloyds Club (4%). I'd keep the NW CC. Lenders don't seem too concerned about multiple accounts, so long as you don't open them too close together or just before you apply for a loan. If you're saving for a deposit you want your money tied up (until just before you buy your house).

Mjkpio

Eco_Miser wrote: »

Forget about cash (N)ISAs until the rates get much better. Look at NW FlexDirect (5%), TSB Plus (5%), Lloyds Club (4%).

I'll go into NW and see if they can upgrade my Flex to the 5% account then. Might mention that I'm looking to move to FirstDirect and see what they can offer me as an incentive to stay (if anything).

Eco_Miser wrote: »

I'd keep the NW CC. Lenders don't seem too concerned about multiple accounts, so long as you don't open them too close together or just before you apply for a loan.

Fair point.

Eco_Miser wrote: »

If you're saving for a deposit you want your money tied up (until just before you buy your house).

This could be anywhere in the next 3-12 months!

badger09

If you want to keep your travel insurance, simply apply for a Flexdirect account in addition to existing account. Just be aware that you won't be able to shuffle money between them to meet the monthly funding conditions though, so you'll need an extenal account anyway

Nationwide will not offer you any incentive to stay.

Mjkpio

badger09 wrote: »

If you want to keep your travel insurance, simply apply for a Flexdirect account in addition to existing account. Just be aware that you won't be able to shuffle money between them to meet the monthly funding conditions though, so you'll need an extenal account anyway

Nationwide will not offer you any incentive to stay.

Not bothered by the travel insurance.

You don't ask, you don't get! (Though I probably agree!)

Mjkpio

Hmm, so turns out I actually have the FlexDirect already and not the FlexAccount!

FYI - Nationwide have just released Contactless payment cards today and can order one for you (if your card is 'damaged'!)

As I had taken out the FlexDirect, Regular Saver and Credit Card quite a while back I actually have better rates than what they offer to customers now!

So I'm all happy now, sticking with Nationwide and Santander.

Thank you for your comments.

colsten

Mjkpio wrote: »

As I had taken out the FlexDirect, Regular Saver and Credit Card quite a while back I actually have better rates than what they offer to customers now!

What better rates, which account(s)?

How long have you had your FlexDirect? Interest drops to 1% after 12 months.

Eco_Miser

[Buying house]

Mjkpio wrote: »

This could be anywhere in the next 3-12 months!

If you're that close, a regular saver is definitely out.

Mjkpio

colsten wrote: »

What better rates, which account(s)?

How long have you had your FlexDirect? Interest drops to 1% after 12 months.

Turns out I upgraded to the Flex Direct in March (completely forgot I had!) so have all the benefits of that. (5%)

I get 2% on the regular saver (down from 6% originally, but still higher than their newer accounts of 1.7%) (but I don't really use it because of the Santander 123 account giving me 3%)

The Nationwide Credit Card's 18months 0% has expired, but I only have it for emergencies and is free if I pay it off in full every month. (Though the Balance is at £0 anyway)

The Nationwide ISA I have pays 2.25%, but I think the Santander still works out a bit better at 2.4% after tax.

I have to say, I've recently discovered the Nationwide "Graph" and "Calendar" views - brilliant!

Eco_Miser wrote: »

[Buying house]

If you're that close, a regular saver is definitely out.

The Nationwide RegSaver is instantly accessible with no penalties, so if for some reason I wanted to use that instead of the Santander 123 then I could. (Be a while before I max out the £20k S123 account!)

colsten

Mjkpio wrote: »

Turns out I upgraded to the Flex Direct in March (completely forgot I had!) so have all the benefits of that. (5%)

I get 2% on the regular saver (down from 6% originally, but still higher than their newer accounts of 1.7%) (but I don't really use it because of the Santander 123 account giving me 3%)

The Nationwide Credit Card's 18months 0% has expired, but I only have it for emergencies and is free if I pay it off in full every month. (Though the Balance is at £0 anyway)

The Nationwide ISA I have pays 2.25%, but I think the Santander still works out a bit better at 2.4% after tax.

I have to say, I've recently discovered the Nationwide "Graph" and "Calendar" views - brilliant!



The Nationwide RegSaver is instantly accessible with no penalties, so if for some reason I wanted to use that instead of the Santander 123 then I could. (Be a while before I max out the £20k S123 account!)

Doesn't look as if any of the above rates are unique to you. Although I can't recall that Nationwide ever had a 6% Regular Saver, and I don't think they offer on with 1.7% now. The best rate available to everybody is 2.5%. I also think you may not have fully understood how the Nationwide Regular Savings account works - the interest rate depends on the overall increase in the account balance in that calendar month, not how much you have in the account. There can therefore be a penalty if you withdraw more than you deposit in any given calendar month.

You are right though, unless you have maxed the Santander 123 and other 3, 4, 5 and 6% accounts, there is no point in using the Nationwide Regular Saver.