what next

jcl_2

Hello

I have a 5 years account maturing on the 5th Nov with saga (BM).
They have offered a 2 years fixed at 2.20% monthly income.
obviously the switch-over would be quite simple with no loss of interest. I have been searching the internet for the past couple of days but can't find anything that betters this offer.
Any help appreciated.
Thanks
Regards
jcl

badger09

Depending on how much you have saved, and how much effort you are prepared to put in, you could achieve 3% - 5% in a variety of current accounts. There are lots of threads - eg TSB, Nationwide, Club Lloyds, Santander, BoS, Tesco etc

jcl_2

Thanks badger for the reply.
Yes I have looked at those accounts but we're both retired so these accounts would be quite difficult to maintain we only have a couple DD's at the bank and having to feed these accounts would mean transferring money here there and everywhere.

badger09

jcl wrote: »

Thanks badger for the reply.
Yes I have looked at those accounts but we're both retired so these accounts would be quite difficult to maintain we only have a couple DD's at the bank and having to feed these accounts would mean transferring money here there and everywhere.

I'm retired too :T

It means I have a great incentive to maximise the interest on my savings, and that I have the time to do it

It really isn't difficult to maintain, though obviously takes more effort than placing it in a fixed rate account and forgetting about it for 5 years.

The question of direct debits is also very easy to solve.

If you're prepared to say approx how much is involved, I'll happily suggest some options for you - as will other regular posters

JimmyTheWig

jcl wrote: »

They have offered a 2 years fixed at 2.20%

That sounds pretty good to me.
Have a look at http://www.moneysavingexpert.com/savings/savings-accounts-best-interest?_ga=1.159835901.1926917370.1404490112#fixed

Depending on how much you have in the account, this shows that you can get 2.25% on a two year fix, though hardly worth switching organisations for such a tiny increase.

Again depending on how much you have in there you can get a better rate by fixing for longer.


If monthly income from this lump sum is important, you don't necessarily need an account that pays out monthly.
You could leave some money outside of the fix and use that to "pay" yourself each month.
Obviously an account that pays out monthly would be more convenient in terms of this, so again for the paltry increase in interest rate on offer I wouldn't bother switching if I were you.

bowlhead99

At risk of repeating what everyone else has said on lots of other threads here - feeding the accounts is not that difficult because you have enough savings to slosh back and forth between your account at the bank that pays a lot on its current account and needs to be 'fed' a minimum monthly amount, and your main bank account somewhere else that might pay a bit less of a rate but you like their customer service.

As a really quick example. You and your other half could each have a Santander 1-2-3 account, and you could have another one joint between you. As each account pays 3% interest up to £20k, you can have £60k paying you 3%, which is a pretty substantial maximum even before looking at the TSB and Lloyds and Nationwide options etc etc etc. 3% on £60k is better than what your Saga renewal pays, and all of it is instant access (in case of emergency, or in case a better rate comes along in a year), rather than being locked up for 2 years.

So then, apart from some minimum amount being paid in and out by standing order from your original 'main account' when you receive your pension each month, you just need two direct debits active on each account.

On your new joint account, one of these direct debits could be your gas bill and one could be your electric. If both with the same provider on one bill, what about council tax? Maybe you have a phonebill or internet bill or mobile bill that can be paid monthly etc etc. Santander pays cashback on all these types of bills, which is a good wheeze and offsets the nominal £2pm account fee.

You might still be short of a direct debit or two. One could be to a tesco online savings account where you set up the savings account at tesco and then tell tesco to just pull a tenner a month through from your current account at Santander. Presto, another active direct debit that doesn't actually cost you anything. If you are still stuck, the Red Cross or NSPCC would love to have a direct debit paying them a few pounds a month. After all, if you're earning an extra 1% on your savings, that's £100 (before tax) for every £10,000 we're talking about and with a potential £60,000 stashed at Santander alone, you can easily make a bunch of extra income. Give a little to charity by creating another active direct debit, and everyone's a winner!

The only question is if you are both retired with very small incomes, will the banks want your business when you apply for the account. If they do, you're good to go, and it's really not a lot of hassle if you don't involve loads and loads of banks to try and cover £90k+ of your savings with all the 3%, 4%, 5% accounts out there.

jcl_2

Pay a monthly account fee of £2.
Fund the account with £500 a month (excludes internal transfers). A minimum balance of £1,000 is needed to receive interest.
Set up at least 2 Direct Debits. You’ll get monthly cashback on selected household bills you pay by Direct Debit

gas/electric 1 dd
phone/internet 1 dd
council tax paid in full end Oct every year
santander needs 2 dd's on each account.
dd's can't be done on any accounts (excludes internal transfers).
and each account needs feeding £500 a month.
I was thinking £65.000 in saga approx £120 month income
santander would be £150 month on £60.000.
so quite a substantial difference.
How do we get around the above little hiccups
thanks
jcl

xylophone

Actually a couple of DDs for each of you is quite easy to arrange.

You can each open one Tesco Internet Saver and one instant access saver and set up a monthly direct debit from both (need only be for £1).

http://www.tescobank.com/savings/

Why not change your council tax to a monthly direct debit?

Have you looked at opening two sole and one joint TSB Classic plus? These can be internally funded by same day standing orders - the same applies to up to three BOS Classic Vantage sole accounts each.



https://forums.moneysavingexpert.com/discussion/5090719

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/293747/Fact_sheet_template_-_10__tax_9.pdf might be worth a look.

bowlhead99

Yes the difference of £60000 at 3% over 650000 at 2.2% is over £350 in a year gross, and that's without investing the last £5000 in some other lucrative account (e.g. 4% at Lloyds) for a further £200 interest!

So you already have two direct debits sorted out for your brand new shiny joint Santander account. You just need four more for the other two accounts. There are others you can think of like water, council tax, car tax, TV licence ? If there's no discount for paying council tax in one lump, and you're looking for direct debits, consider not paying it in one lump?

Even if those other bills are non starters for some reason - no reason you can't use direct debit contributions to charities to meet your direct debit quota. And as mentioned, there are a variety of savings accounts with other banks (e.g. Tesco) that will allow you to log in to that Tesco account, and set up a direct debit to pull a fixed amount of money from a current account. You could do one and your wife could do one.

So there are absolutely no reasons why you would struggle to find six direct debits out of all that lot, especially if there is several hundred pounds of extra interest coming to you as a serious incentive.

How do you fund £500 a month into each account? Well, you have an account with some other bank where your pensions come in, right? Do a standing order to your Santander joint account for over £500 and you'll meet the terms and conditions for that Santander joint account. £500, £600, £1000, whatever you like. Your utility bills going out of Santander by direct are probably less than that, so set up a standing order to move some of it back in the other direction back to your old current account on the same day. Or maybe a day or so later to make sure nothing bounces, around weekends or bank holidays etc. Shouldn't ever be a problem with a £20k cash buffer but some people are cautious...! Then your money is back in your 'old' account and one of the Santander accounts is fully satisfied, but the other two accounts still haven't had their minimum contributions.

So, then just set up a standing order to move another chunk of cash to Santander from your main account to the second Santander one another day of the month, and one standing order from that second Santander account to send it back. And repeat for the third one.

So, there is no problem with feeding £500+ into an account from an external transfer, when you have £60k of cash and more than one bank. Just fire it over by standing order and fire it back the other way.

If you can be bothered more accounts than just Santander, your other spare £5000 could spend most of its time sitting in Lloyds Club account which has similar T&C to Santander and pays 4% where the balance is between £4,000 and £5000. Advantage of that one over the TSB mentioned by xylophone, is that it pays interest on more money - so it's fewer accounts to set up to cover your £5k of spare cash - but the rate is a bit lower and it does need direct debits too.

badger09

jcl wrote: »

Pay a monthly account fee of £2.
Fund the account with £500 a month (excludes internal transfers). A minimum balance of £1,000 is needed to receive interest.
Set up at least 2 Direct Debits. You’ll get monthly cashback on selected household bills you pay by Direct Debit

gas/electric 1 dd
phone/internet 1 dd
council tax paid in full end Oct every year
santander needs 2 dd's on each account.
dd's can't be done on any accounts (excludes internal transfers).
and each account needs feeding £500 a month.
I was thinking £65.000 in saga approx £120 month income
santander would be £150 month on £60.000.
so quite a substantial difference.
How do we get around the above little hiccups
thanks
jcl

First of all, Santander DDs do not need to be paid every month - they just have to be active (ie be capable of being paid as most lapse after 13 months)

If you can't do it yourself online, ask your gas/elec provider to transfer your monthly DD to Santander a/c 01

If you can't do it yourself online, ask your phone/internet provider to transfer your monthly DD to Santander a/c 02

Can you pay Council Tax monthly? If not, no matter, but ask council to transfer the DD to Santander a/c 03.

Open 2 Tesco savings accounts and set up DDs to pull say £1 pm from each of your 3 Santander accounts

So now you have met the DD requirements, and have probably covered the monthly £2 fee on Santander a/cs 01 and 03 at least

Now set up Standing orders from your existing current account for at least £500 per month to each of your 3 Santander accounts, and set up Standing orders from each of your 3 Santander accounts back again to your existing current account. For maximum benefit make sure each account is as near to £20k as possible

Alternatively, log onto internet banking once a month to pay in the £500, and do any necessary topping up - but SOs will probably be easier for you.

It sounds a bit complicated, but once set up, you can leave it to look after itself.

Not sure how you arrive at your monthly interest figures unless you're both non taxpayers.

jcl_2

First of all, Santander DDs do not need to be paid every month - they just have to be active (ie be capable of being paid as most lapse after 13 months)

Water is dd paid twice a year June/ Oct.
Gas/Electric Quarterly dd.
Phone internet monthly dd
c/charge is £1700 I pay this Oct end on c/card and pay it in full when the statement arrives approx 7 weeks later,so I to keep my £1700 approx 9 more months than the council does. not much interest but better than none at all.
would credit card dd's be accepted.

If you can't do it yourself online, ask your gas/elec provider to transfer your monthly DD to Santander a/c 01

Can do this online

If you can't do it yourself online, ask your phone/internet provider to transfer your monthly DD to Santander a/c 02

Can do this online

Can I set up dd's for my c/card payments

Open 2 Tesco savings accounts and set up DDs to pull say £1 pm from each of your 3 Santander accounts

So now you have met the DD requirements, and have probably covered the monthly £2 fee on Santander a/cs 01 and 03 at least

Now set up Standing orders from your existing current account for at least £500 per month to each of your 3 Santander accounts, and set up Standing orders from each of your 3 Santander accounts back again to your existing current account. For maximum benefit make sure each account is as near to £20k as possible

no problem here moving money each way probably use the same £500 and set the accounts up 4 days apart

Alternatively, log onto internet banking once a month to pay in the £500, and do any necessary topping up - but SOs will probably be easier for you.

Not sure how you arrive at your monthly interest figures unless you're both non taxpayers.
Correct

Thanks
jcl