Savings Account or ISA?

DiNZi

colsten wrote: »

I agree in principle but I would always consider to have all my "real" DDs on the Santander 123 as many (or all, in my case) can earn cashback. My average monthly cashback is about £10, leaving me with £8ish after the monthly fee. So instead of me paying Santander £24 a year, they are paying me some £96 a year for having the account. That even beats the added value of a Halifax Reward in my case (though, of course, I have some of them, too).

My extra DDs (for Halifax, Lloyds and whoever else might ask for DDs) are small £1 DDs going into a couple of my savings accounts.

You mentioned DDs going to your savings accounts? Aren't those standing orders, which I'm sure isn't seen as a direct debit, right?

Thanks for the info everyone, I'll most probably use the Tesco method for the extra DDs that I need. Tomorrow morning have an appointment at my nearest Santander to change my regular account to a current 123, will move the 15k plus whatever extra into there and begin the setup for Lloyds ect.. over the weekend.

YorkshireBoy

DiNZi wrote: »

You mentioned DDs going to your savings accounts? Aren't those standing orders, which I'm sure isn't seen as a direct debit, right?

Thanks for the info everyone, I'll most probably use the Tesco method for the extra DDs that I need.

These two statements/questions contradict each other. First you doubt they're DDs, then you say they are!

Tesco savings accounts will pull funds from a current account by direct debit, thereby satisfying the requirements of various current accounts, eg Halifax Reward, Club Lloyds. They'll also satisfy Santander 1-2-3, but remember they don't have to pull money each month from Santander...merely be 'set up'. A word of warning...if you don't pull money from Santander to Tesco savings for 13 months your DDI will lapse under the dormancy rules and you'll forego interest until you can get them set up again. At £30/month net of BR tax (on £15K) that's an expensive mistake to make!

Tomorrow morning have an appointment at my nearest Santander to change my regular account to a current 123, will move the 15k plus whatever extra into there and begin the setup for Lloyds ect.. over the weekend.

A couple of comments:

The £24 annual fees for the 1-2-3 account will make quite a dent in your return. The other options mentioned earlier in the thread would earn you more. But obviously you take the approach you're happy with.

You'll need at least £4K in Club Lloyds to enjoy 4% AER. It didn't sound like you had £19-20K to play with? If you move the £4K out of Santander to Club Lloyds the £24 Santander fees will impact even harder.

Are you absolutely clear on what you're doing?

colsten

DiNZi wrote: »

You mentioned DDs going to your savings accounts? Aren't those standing orders, which I'm sure isn't seen as a direct debit, right?

Honest, please do read again what has been said.

I do sometimes make mistakes but in this case I have not made any. When I said DD I meant DD :wall:

colsten

YorkshireBoy wrote: »

The £24 annual fees for the 1-2-3 account will make quite a dent in your return.

Which most people can easily eliminate by making use of the Santander DD cashback offer. Ref http://forums.moneysavingexpert.com/showpost.php?p=67143667&postcount=41

DiNZi, how much cashback can you make from your DDs: http://www.santander-products.co.uk/banking/calculator/123ca.html?

YorkshireBoy

colsten wrote: »

Which most people can easily eliminate by making use of the Santander DD cashback offer. Ref http://forums.moneysavingexpert.com/showpost.php?p=67143667&postcount=41

DiNZi, how much cashback can you make from your DDs: http://www.santander-products.co.uk/banking/calculator/123ca.html?

I think DiNZi has said they're still living with parents and only have 2 DDs...mobile phone and a broadband/TV package? If that's the case they'd need to total around £70 a month (some £840 per annum) to offset the £24 per annum fees. Possible...but unlikely to be that much surely!?


But I agree for most homeowners/bill payers it's easy.

DiNZi

Can the Santander 123 monthly fee be avoided or waived by any method?

colsten

DiNZi wrote: »

Can the Santander 123 monthly fee be avoided or waived by any method?

Sort of. If you have DDs that qualify for cashback, you might be able to get more than £2 a month. Many people make upwards of £10 in DD cashback each month.

Santander will, however, charge you the £2 regardless.

Kendall80

DiNZi wrote: »

Can the Santander 123 monthly fee be avoided or waived by any method?

Going for Club Lloyds instead?

Seriously though the £2 monthly account fee is easily accounted for by a few direct debits. I have council tax, utils and one or 2 others coming out and my DD:Fee ratio is always greater than 1

DiNZi

Still haven't had any time to set this up yet but will do soon, I think for now I will just get a Santander 123 and Club Lloyds. If I setup the whole chain, right, how much could I benefit from interest per month with £14k? Ball park figure, just an estimate.

polymaff

DiNZi wrote: »

Still haven't had any time to set this up yet but will do soon, I think for now I will just get a Santander 123 and Club Lloyds. If I setup the whole chain, right, how much could I benefit from interest per month with £14k? Ball park figure, just an estimate.

Santander: £2 per month, per £1,000 invested
ClubLloyds: £2.60 per month, per £1,000 invested

both figures nett of basic rate tax.