Savings accounts deposits by Direct Debit? UPDATED

edited 15 April 2017 at 10:01PM in Savings & investments
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  • edited 11 January 2015 at 7:47PM
    planteriaplanteria Forumite
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    edited 11 January 2015 at 7:47PM
    Ah..with you. Rate match with AA if you maintain £1k bal. but we don't want to do that..do we? Aldermore at 1pc??
  • waqasahmedwaqasahmed Forumite
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    eskbanker wrote: »
    I thought it was pretty much taken as read that these accounts are only recommended as a means of satisfying the conditions for current acccounts that pay decent interest! In other words, if you're wanting to maximise interest, use these accounts as temporary homes for small amounts before transferring out somewhere better to get a better rate....

    Edit: just saw post #24, as you say, as it happens, Tesco is currently as good as other easy access savings accounts, albeit only by virtue of the one year bonus, so if you've filled up all the 3-5% opportunities then there are worse places to dump surplus funds if you want to keep significant amounts in cash form.

    That's what I thought it was too tbh. It's worth losing what ~20-30p/year(effectively, because £12 in a high interest account wouldn't have made too much) in to these kind of savings account, even IF they pay no interest at all, because you'll get far more at other banks, and it massively dwarves the amount of money you'r "losing"
  • edited 12 January 2015 at 8:44PM
    waqasahmedwaqasahmed Forumite
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    edited 12 January 2015 at 8:44PM
    planteria wrote: »
    Ah..with you. Rate match with AA if you maintain £1k bal. but we don't want to do that..do we? Aldermore at 1pc??

    Why not. I don't really fancy keeping £1000 in a !!!!!! account that pays 1%, when there are far better deals out there :D

    I prefer to have a DD for £1/month going to each bank, and there's nothing stopping you from still trying to get the absolute best interest rate you can, even for £1/month (or £12/year) though it's not the end of the world if you don't get a "good" savings account, that allow for DD's

    I mean for £12/year, at 1% you make, what 12p... (Pre tax)

    Some pay less

    So:

    1.00% pre tax = 12p profit
    0.75% pre tax = 9p profit
    0.50% pre tax = 6p profit
    0.25% pre tax = 3p profit

    Which is generally the sort of rates you're looking at, generally speaking

    ie: 0.25 - 1% AER

    In reality, consider it a loss, because you'd probably make around 3 - 6% at most other places

    So... you'd make between 36p and 72p on the £12 (for the year) at other places, but tbh, the entire reason you're doing this is so that you can actually get those deals in the first place, so the interest lost here, is massively dwarfed by the interest you get at other places

    Even for something like the Halifax reward account, you make a fiver every month or £60/year (Pre tax it's £75, but you get given £5/month and then you have to claim back, if you're not a tax payer)

    Make £75 out of £0, for a loss of 72p is pretty good!
    This is assuming you're paying in £1/month via direct debit

    In my case,I have two direct debits to two different saving accounts, so I "lose" a max of £1.44 (£1.15 after tax at 20%)

    However what I also do is siphon that fiver off in to a bank of Scotland account, paying 3% AER

    Doing the maths, Im still better off:

    Pre tax:

    £75*1.03 = £77.25
    £2.25 profit (£1.44 loss)
    Total: £0.81 profit

    After tax:

    £60*1.024 = £61.44
    £1.44 profit (£1.15 loss)
    Total: £0.29 profit

    Yeah Im talking absolutely pennies, but you may as well squeeze the most that you can get out of your interest (I mean it is an automated process), and doing the maths, I win two times! (Even if the second time is just pennies)
  • 20102010 Forumite
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    But have I seen a post saying Tesco is dropping later this month/early Feb?

    Whether Tesco drops their savings rates or not seems irrelevant to me because the only reason they are needed is for a DD which in the case of Santander gets you 3% on £40k.
    Open with £1, set up a DD for £1 a month by DD ---- job done.
  • edited 17 January 2015 at 12:45PM
    YorkshireBoyYorkshireBoy Forumite
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    edited 17 January 2015 at 12:45PM
    2010 wrote: »
    Whether Tesco drops their savings rates or not seems irrelevant to me because the only reason they are needed is for a DD which in the case of Santander gets you 3% on £40k. Open with £1, set up a DD for £1 a month by DD ---- job done.
    If you've maxed out the current account offerings, and the regular savers, and are reluctant to 'invest' (or invest any more), it's probably very relevant to others.

    Also, how can I (not we) get 3% AER on £40K with Santander (now)?
  • planteriaplanteria Forumite
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    i assume 2010 means 1 Single Person account and 1 Joint account..

    and i do get the point that the rate doesnt matter to many people. but, fwiw, i happily leave some funds with accounts that my DDs pay into, so if there can be some interest generated it's a little bonus.
  • YorkshireBoyYorkshireBoy Forumite
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    planteria wrote: »
    i assume 2010 means 1 Single Person account and 1 Joint account..
    But that would be £30K, not £40K (because half would belong to the other party). If they do mean joint, then that's £60K in total (but, as I said above, only £30K of it is mine).


    I wondered if they'd relaxed the rule on number of sole accounts (doesn't appear so on their website), or perhaps 2010 knows a way to circumvent the restriction?
  • edited 17 January 2015 at 1:53PM
    waqasahmedwaqasahmed Forumite
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    edited 17 January 2015 at 1:53PM
    If you've maxed out the current account offerings, and the regular savers, and are reluctant to 'invest' (or invest any more), it's probably very relevant to others.

    Also, how can I (not we) get 3% AER on £40K with Santander (now)?
    How about peer to peer lending? Or index trackers
  • edited 17 January 2015 at 1:59PM
    waqasahmedwaqasahmed Forumite
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    edited 17 January 2015 at 1:59PM
    2010 wrote: »
    Whether Tesco drops their savings rates or not seems irrelevant to me because the only reason they are needed is for a DD which in the case of Santander gets you 3% on £40k.
    Open with £1, set up a DD for £1 a month by DD ---- job done.


    To me, this. I initially thought I was "losing" money, but then I realised, Im STILL making more money, purely because the interest is siphoned off in to another account :D

    Clydesdale and Yorkshire bank allow up to 3K each in their accounts as well at 2%

    Oooh here's something!

    http://www.alrayanbank.co.uk/savings/fixed-term-deposits/

    The rates are quite "poor" compared to the top current accounts, but they're not bad either.

    I had some money in them some 2 years ago (Well it was still there. I just got it back this year)
  • 20102010 Forumite
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    I wondered if they'd relaxed the rule on number of sole accounts (doesn't appear so on their website), or perhaps 2010 knows a way to circumvent the restriction?

    Well Yorky short of getting married and trusting and sharing with one another I`m afraid you`re stuck with the limit you have.
    A married couple as you know can have one each and a joint one making £60k.
    Why don`t you complain that singles are being discriminated against.
    Quote the human rights act, that usually does the trick.;)
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