Any better instant access than Tesco 1.35% ?

ericpode

I've been looking around for an instant access account to transfer to, as my existing savings rate is reaching the end of its special 12 month rate.

I'm already using Santander 123 so that's ruled out.

As far as I can see, Tesco at 1.35% (inc 12 month extra interest) seem to be about the best rate for an easy internet no hassle account.

So before I opt for Tesco, has anyone found a better rate ?

Archi_Bald

Might as well put it under the mattress if you are happy to lose money to inflation in a 1.35% account.

Carolinemjs

Archi_Bald wrote: »

Might as well put it under the mattress if you are happy to lose money to inflation in a 1.35% account.

So how do YOU beat inflation?

Milarky

Carolinemjs wrote: »

So how do YOU beat inflation?

No one can really do anything about the problem (inflation) or its cause (irresponsible governments) but it is possible to get closer than 1.35%. See 'best regular savers' on the sticky thread's post. Deals come and deals go, but there are several accounts described there paying 3% there still available to open. And 3% is the 'starting' figure for current accounts since you can currently get 5% @ TSB and 4% @ Lloyds for not a great deal of organisation

(That would be my answer to what he meant, anyway)

Archi_Bald

Thanks Milarky. Didn't even have to move my lips / type the words.

Carolinemjs

Sorry Arch Bald if you find such questions tedious, some of us, quite a lot by the looks of this forum, struggle perhaps because we're good at other things or have never had money that needed investing before.

LEP

Archi_Bald wrote: »

Might as well put it under the mattress if you are happy to lose money to inflation in a 1.35% account.

You must have a magic mattress if it pays you interest to keep money stashed under it...

bowlhead99

Carolinemjs wrote: »

Sorry Arch Bald if you find such questions tedious, some of us, quite a lot by the looks of this forum, struggle perhaps because we're good at other things or have never had money that needed investing before.

I don't think he meant any offence but the question does come up a lot on this forum - you can't get too far down any thread without someone mentioning the promotional high interest current accounts in response to a person talking abouve cash ISAs or normal dedicated savings accounts. Fortunately there are so many people with the same mindset that you often see people answer questions that were directed at others, because it all becomes a bit routine.

bowlhead99

LEP wrote: »

You must have a magic mattress if it pays you interest to keep money stashed under it...

Well a 1.35% account earns, on every hundred quid, between 54p and 108p depending on what your marginal rate of tax is, unless you're in the minority who for one reason or another are non taxpayers or qualify for 10% rate.

Meanwhile at government target 2% inflation (and you can argue whether their measures are realistic or achievable, but lets pretend they are), your £100.54 or £101.08 after a year is only worth £98.56 to £99.10 in today's money.

So clearly you might prefer to have interest than not have interest, but for some people in the most awkward tax bands, after tax there is only going to be about 50p in it on every starting £100 (i.e. about half a percent) and the big picture is that even if you pay zero tax you're still worse off than when you started.

Therefore, it's little wonder that people look to exploit other methods for a return (whether higher interest accounts, investments etc)

Carolinemjs

Bowlhead in the past week I've opened 2 Santader 123 accounts a Leeds Isa and 2 TSB accounts. I have piles of paper and frankly the prospect of opening more current accounts, needing to feed them, set up DDs etc and keep track is pretty daunting. My income at present is less than £200 pwk and I need to make what money I suddenly have work as hard as possible. For someone who only had a current acc with a couple of DDs previously its a lot to take on board and organize. I think I'm doing pretty well but I've still got about 20,000 to put somewhere?

bowlhead99

The other big banks with higher rate accounts include Bank of Scotland Vantage amd Club Lloyds. Nationwide Flexdirect is 5% (but only on 2.5k). First Direct give you a sign-on bonus and then offer you a 6% regular saver account - doesn't take a lump sum but you could gradually feed over time. Halifax pay you a fiver a month even if the account is virtually empty most of the month, as long as you pay the minimum amount in.

Once you've been through all these (and you can have more than one account with some of them) you are scraping around a bit - Yorkshire bank will let you have another £3k at 2% which is still better than a 1.35% ISA for a low rate taxpayer, and you'll find more if you keep looking.

You are right it is a lot to get organised if you want to max out all the bonus money available in the system. Once it is all running smoothly it can keep going for a year or so without much intervention. Of course at some point the offers expire. And you'll reach a point where you say enough is enough. You might already be at that point already.

If you already have £50k+ in cash filling up your existing accounts and are still seeking a home for another 20k, you could consider whether you actually need that last 20k to be in cash and look at investment funds and so on. But it depends when you need the money back and what other long term goals and aspirations you have.