Advice on how to bank with a small income

Kelxx

Hi I'm looking for some advice.

I have a very small income from self employment. I have traditionally used the 'envelope' method of budgeting. I have been using YNAB software since the start of the year & no longer need all these different accounts, and would like to simplify my accounts, and just have the one account.

Whilst looking around for suitable accounts, I came across the TSB Classic Plus, which seems to offer better rates than my ISA. Am I right in thinking I don't really need an ISA with such little cash?

I would be grateful for any ideas, I don't turn over much money, but want what I do have, to work for me.

Thank you

masonic

Kelxx wrote: »

Whilst looking around for suitable accounts, I came across the TSB Classic Plus, which seems to offer better rates than my ISA. Am I right in thinking I don't really need an ISA with such little cash?

That's right. With substantially less then £15k in savings, if you can get a better return outside the ISA, then there is no point using an ISA. If that situation changes in the future, your savings are unlikely to be above the ISA allowance, so you can easily move the cash back into an ISA.

It might be worth opening two of these accounts and splitting the money between them. You can then set up a standing order in each direction to meet the £500 per month funding criteria.

Kelxx

masonic wrote: »

That's right. With substantially less then £15k in savings, if you can get a better return outside the ISA, then there is no point using an ISA. If that situation changes in the future, your savings are unlikely to be above the ISA allowance, so you can easily move the cash back into an ISA.

It might be worth opening two of these accounts and splitting the money between them. You can then set up a standing order in each direction to meet the £500 per month funding criteria.

Thank you for your reply, Masonic.
Will money from one account to another meet the funding criteria? I thought it had to be from an outside source?

masonic

Kelxx wrote: »

Thank you for your reply, Masonic.
Will money from one account to another meet the funding criteria? I thought it had to be from an outside source?

No, there aren't any restrictions on where the money comes from, so simply transferring from one account to the other is all you need to do.

B_G_B

And please don’t forget to set all correspondence to paperless.

Kelxx

Just a message to say, I've now switched RBS to one TBS Classic Plus & Nat West to another. Should be switched on the 3rd September, I'll then set up SOs in each direction.

Thanks again for your advice

GreenBitterfly

I'm also hoping to open the TSB Classic Plus account, despite being on a small budget. Using some of my wages to make up the £500, and then pass through about £300 to 'top it up' to the £500. Hoping to use it as a 'rainy day' savings account and a regular saver, so that I can put in what I can when I can, rather than being fixed to a set amount. Will probably apply at the weekend.