Switching Money to Gain Max Interest

XYZXXX

Hi, I have just switched my Silver Vantage current account to a Club Lloyds. They waivered £5 off my monthly charges if I pay my salary over £1,500.00 per month and have 2 direct debits/standing orders. I will also benefit with some lifestyle gifts and 4% gross interest if in credit over £5,000.00. So far so good. I have just realised that I have also an ISA that gives me a not so generous 1% per year interest. I was wondering whether it would be better to transfer my ISA money in the Club Lloyds account since the latter, offers a better rate of interest. can you advice please?

Archi_Bald

It much depends on how much you have in your ISA but if it's less than £15,000, you are absolutely right, current accounts might be a much better deal for you.

Plenty of mention of this on the ISA board.

Fruit_and_Nut_Case

The TSB Classic Plus account pays 5% on up to £2000 so is even better. Many people here have multiple current accounts to take advantage of better rates.

jennifernil

XYZXXX wrote: »

Hi, I have just switched my Silver Vantage current account to a Club Lloyds. They waivered £5 off my monthly charges if I pay my salary over £1,500.00 per month and have 2 direct debits/standing orders. I will also benefit with some lifestyle gifts and 4% gross interest if in credit over £5,000.00.

Have you got that last bit correct?

I thought there was no interest paid on balances over £5000.

Did you switch to a Club Lloyds, or add Club Lloyds to a Silver account?

colsten

XYZXXX wrote: »

I will also benefit with some lifestyle gifts and 4% gross interest if in credit over £5,000.00.

The 'gifts' (gimmicks) are for any Club Lloyds customers, independent of the account balance.

No interest is paid on any amount over £5,000. 4% interest is paid on up to £5,000 if the balance is between £4,000 and £5,000, and 2 DDs are paid out in the month in question. Lower balances are only eligible to max 1% or 2% interest.

XYZXXX wrote: »

They waivered £5 off my monthly charges if I pay my salary over £1,500.00 per month and have 2 direct debits/standing orders.

The DDs have no influence on the monthly charge. Standing Orders qualify for nothing. The charge gets waived if at least £1,500 a month gets paid in, doesn't have to be salary.


Best perhaps to stick to taking information from the T&Cs: http://www.lloydsbank.com/assets/media/pdfs/current-accounts/clublloyds_terms%20and%20conditions.pdf

polymaff

XYZXXX wrote: »

Hi, I have just switched my Silver Vantage current account to a Club Lloyds. They waivered £5 off my monthly charges if I pay my salary over £1,500.00 per month and have 2 direct debits/standing orders. I will also benefit with some lifestyle gifts and 4% gross interest if in credit over £5,000.00. So far so good. I have just realised that I have also an ISA that gives me a not so generous 1% per year interest. I was wondering whether it would be better to transfer my ISA money in the Club Lloyds account since the latter, offers a better rate of interest. can you advice please?

It is so important that folk discard that axiom that "ISAs come first" (see this week's Radio Times, p161:().

Best strategy comes first and for most that boils down to highest rate of return after tax. Even if you are a 40% tax-payer, that 1% in an ISA is beaten by any taxable account offering more than 1.67% - and there are lots of instant-access taxable accounts offering way more than that.

Steve_xx

polymaff wrote: »

It is so important that folk discard that axiom that "ISAs come first" (see this week's Radio Times, p161:().

Best strategy comes first and for most that boils down to highest rate of return after tax. Even if you are a 40% tax-payer, that 1% in an ISA is beaten by any taxable account offering more than 1.67% - and there are lots of instant-access taxable accounts offering way more than that.

The view needs to be kept in proportion, given the fact that a tax wrapper is forever, not just for this year. Given the dire ISA rates of interest it might be better to lock away for around two years in order to go some way to getting close to current account rates. That way you protect the tax wraper and can probably get a little over 2%, or even 3% by going with Dot Community.

I think at the minute the best strategy may well be to put your dosh in the highest paying current accounts until we get to March 2015, and then take a view of whether to max your ISA for this tax year depending on individual circumstances, what's on offer ISa-wise at that time and whether it's considered likely that a rate hike is imminent.

polymaff

Steve_xx wrote: »

The view needs to be kept in proportion ...

... and that is why I said "for most".

jimjames

polymaff wrote: »

It is so important that folk discard that axiom that "ISAs come first" (see this week's Radio Times, p161:().

Best strategy comes first and for most that boils down to highest rate of return after tax. Even if you are a 40% tax-payer, that 1% in an ISA is beaten by any taxable account offering more than 1.67% - and there are lots of instant-access taxable accounts offering way more than that.

Absolutely.

It's very poor advice that MSE continue to repeat this mantra despite the fact that over 60% of the population have under £2000 savings and the average in cash ISAs is around £7k.

So for all those 60% a TSB current account would be a far better option and if ISAs did suddenly improve they can get their money into one easily with the new limits.

There is no need to worry about protecting a tax wrapper when the average person with £2000 can put it all back in a single year with £13,000 to spare