Beginning to open up new accounts, looking for clarification on some things!

HarlemThorne

I asked a few days ago about some savings accounts / current accounts that would be good for me and received some really good help from a lot of people :j
Now i've actually begun to set them up there are some things I still wonder that i'm having a little trouble figuring out so thought this would be the appropriate place to ask

First thing, i'm with barclays and am wanting to open a current + regular savings account (6%) with first direct and decided it'd be a good idea to switch my current one and grab the £100 too.
Are there any things to be careful about when switching over that could mean I wouldn't get the money?
Was also thinking to switch to halifax first to grab their £100 and then switch a couple of weeks to first direct for theirs and then stay there, though i'm guessing halifax isn't that stupid and has things set up to avoid people doing that?
But regardless even switching just to first direct for their £100 and then opening the savings account would be fine, would have just been nice to get £100 from both and keep the halifax one going for the £5 a month (Though the whole switching money from account to account by DD / SO confuses the hell out of me so never really would get how to do that :rotfl: )

Next thing I was wondering about, for the regular 6% savings account with first direct, I know it's 6% but obviously wouldn't be getting 6% on the £3600 which is the most you can put into that (As I first thought haha ) So if depositing the full £300 a month until I hit £3600 in the last month - how much interest would I have earned? (As I assume a lot of people here have done and had that account by now)

The last thing I was wondering about was the TSB 5% Classic Plus Account (The interest and how much is gained, and just the account in general, their site confused me a little)
As far as I've understood from the forum, I can have two of up to £2000 earning 5%
But as far as I read on their site, I need to

"To earn interest on our Classic Plus account, all we ask if that you pay in a minimum of £500 a month into your Plus account and register for Internet Banking, paperless statements and paperless correspondence."

But not really sure how that works, so I have to in total save £6000 in a year into that account but i'm only getting 5% interest paid on that account, so would it be 5% on £500 for the first month, 5% on £1000 the second, up to 5% on £2000 for the fourth month up until the twelfth month?

And neither the first direct nor the TSB needed any kind of direct debits being done? And only 'per month' deposit needed would be £500 a month for each TSB plus account?

Sorry for the wall of text, just extremely confused as i'm 19 and just finally starting to look into actually learning in depth about saving smartly. And everyone has helped me a lot so far

jennifernil

IMO, if you want to save so much per month, you should open a regular saver, like the FD one.

If/when you have £2000 then open the TSB Classic plus.

jennifernil

Roughly speaking, the FD account paying 6% would give you an average 3% over the full year, so if you save £300 per month that would be £108 before tax.

HarlemThorne

jennifernil wrote: »

IMO, if you want to save so much per month, you should open a regular saver, like the FD one.

If/when you have £2000 then open the TSB Classic plus.

I was planning to do the FD and the TSB around the same time
But that makes sense, are you able to open up the TSB with £2000 from the beginning and then just meet the £500 a month deposits after that? Seems like a great idea considering then every month you'd be getting the 5% on the £2000 until the end of the year i'm guessing? Can't believe I didn't think of that :j

jennifernil wrote: »

Roughly speaking, the FD account paying 6% would give you an average 3% over the full year, so if you save £300 per month that would be £108 before tax.

Ahh that's great, thanks so much for the help

MarkFromCornwall

HarlemThorne wrote: »

The last thing I was wondering about was the TSB 5% Classic Plus Account (The interest and how much is gained, and just the account in general, their site confused me a little)
As far as I've understood from the forum, I can have two of up to £2000 earning 5%
But as far as I read on their site, I need to

"To earn interest on our Classic Plus account, all we ask if that you pay in a minimum of £500 a month into your Plus account and register for Internet Banking, paperless statements and paperless correspondence."

But not really sure how that works, so I have to in total save £6000 in a year into that account but i'm only getting 5% interest paid on that account, so would it be 5% on £500 for the first month, 5% on £1000 the second, up to 5% on £2000 for the fourth month up until the twelfth month?

And neither the first direct nor the TSB needed any kind of direct debits being done? And only 'per month' deposit needed would be £500 a month for each TSB plus account?

The TSB account that you are interested in is a current account not a regular saver. So you can pay in £2000 right away and earn 5% on the full amount. However, in order to meet their terms and conditions you would need to pay in £500 per month (and you would withdraw £500 on the same day so that your balance would remain at £2000, also you will want to withdraw the interest that is paid into the account because any balances over £2000 don't earn interest).

Archi_Bald

HarlemThorne wrote: »

Next thing I was wondering about, for the regular 6% savings account with first direct, I know it's 6% but obviously wouldn't be getting 6% on the £3600 which is the most you can put into that (As I first thought haha ) So if depositing the full £300 a month until I hit £3600 in the last month - how much interest would I have earned?

FD tell you on their website, or you could use the MSE Reg Saver calculator.

HarlemThorne

Also wondering, how long after I get the £100 joining for halifax, can I close / abandon the account?

Midland45

MarkFromMullion wrote: »

The TSB account that you are interested in is a current account not a regular saver. So you can pay in £2000 right away and earn 5% on the full amount. However, in order to meet their terms and conditions you would need to pay in £500 per month (and you would withdraw £500 on the same day so that your balance would remain at £2000, also you will want to withdraw the interest that is paid into the account because any balances over £2000 don't earn interest).

Or simply set up 2 of these accounts with £2000 each, then set up a standing order from each account to pay the other account £500 on the same day. Then the only "management" is to take out interest each month keeping the balance at £2000. I've set up a high balance txt reminder set at £2001, that way I get a txt to remind me to move my interest out!

YorkshireBoy

Midland45 wrote: »

Or simply set up 2 of these accounts with £2000 each, then set up a standing order from each account to pay the other account £500 on the same day. Then the only "management" is to take out interest each month keeping the balance at £2000. I've set up a high balance txt reminder set at £2001, that way I get a txt to remind me to move my interest out!

If you've two (or more*) of these accounts to manage, here's a couple of other "management" time saving approaches...

1. Automate your interest withdrawal:

£500 from 1->2
£506.50 from 2->1
£513 from 1->somewhere else

£6.50 is roughly the average interest per month (after BR tax)

2. Run with slightly lower balances:

Operating a pair of accounts with just under £2K balances means you only need to make an interest transfer every few months, ie running at £1,980 means "management" is only required every 3 months, and £1,960 means action is required just twice per year. Just two cross-funding £500 SOs are required here.

Of course the above only reduces the 'actions' required. You should still check the accounts periodically for fraudulent transactions etc!


* Looking after a partner's or joint account in addition to your own.

colsten

HarlemThorne wrote: »

Also wondering, how long after I get the £100 joining for halifax, can I close / abandon the account?

You don't get £100 just for joining, you need to switch another current account to Halifax. They pay the £100 once the switch has been completed.

You can close the account / switch away once the switch is complete and you got your money. However, it might be smarter to keep the account and set it up so you get the £5 every month. It is easy to do and has been discussed lots of times on the forum.

jennifernil

There are also Bank of Scotland Vantage accounts where you can get 3% if you have between £3000 and £5000.

£1000 per month deposit required, but no DDs or switching needed.

Do you have a lump sum to deposit? And how much per month will you have to save?

Edit: have found your original post, see you think you will have £500 to £1000, which is a good amount.

Halifax Reward is a nice little earner, but you need to have 2 DDs these days.

M&S pay £125 at present to switch to them, no DDs needed. No interest paid.