Some guidance on where to begin saving (martins guides confused me)

thomB

Pincher wrote: »

There is a little perpetual motion scheme based on 0% BT promotions.


Open four Regular Savers, at three months intervals. Pay in £250 per month into each: i.e. £1,000 a month. Typically, one Regular Saver per current account, so you need to open more accounts, or use your spouse's. Obviously, they mature once a year, so you need to start one every three months.


If you start all four at the same time, you will have £12,000 tied up in month 12, and hardly anything earning interest in month 1.


At three months intervals, you will have 3000 + 2250 + 1500 + 750 = £7,500 tied up in month 12, and earning interest.
In month 13, £5,500 will be earning interest.
In month 14, £6,500 will be earning interest


I usually keep about £10,000+ 0% BT going.


The monthly minimum will reduce the balance, naturally,
so I try to spend on that card as well, so the payment will pay off the spend, not the 0% Balance.



Payment history (on time, of course) is good for your credit history.


The thing about 0% Balance Transfer is, most of them will transfer a debt from another credit card, but not let you transfer cash to your current account, thus artificially creating a balance.


If you already have a balance, it's actually really useful for kicking off this set up.

You had me until the balance transfer talk

I think that's a great idea though having four accounts. It sounds like a great idea once you get them all up and running in a system. I will explore that as an idea thanks very much

Pincher

thomB wrote: »

You had me until the balance transfer talk

I think that's a great idea though having four accounts. It sounds like a great idea once you get them all up and running in a system. I will explore that as an idea thanks very much

When done well, this little system gives you income for nothing.


The Barclaycard 0% BT Fee is roughly 3% spread over 3 years, so let us say that is borrowing at 1.2%. The Regular Savers range from 4% to 6%. Roughly speaking, each year you


Borrow £8,000 at 1.2% = £96
On the Regular Savers, you get 4%+ on £6000 = £240.


Some of the money has to be in a current account ready to be paid in, so not earning interest, sadly.


So, 240 - 96 = £144 a year for setting things up every three months, without putting your own money in.


I have a two Regular Saver setup, at 6% each, can't be bothered with the 4% ones. If memory serves, the First Direct Regular Saver was 8%: happy days.