Switching advice needed and other questions 31 January 2015 at 8:45PM edited 31 January 2015 at 8:53PM in Savings & Investments 9 replies 669 views

shan735

Hello all.
I'll be starting my very first job as a trainee accountant on Monday and I will be living at home earning minimum wage. This will allow me to save up a large majority of my income and so I would like to think ahead and save as much as possible.

I currently have a flex savings account with HSBC and Natwest. from reading the sites "how to start saving" guide I gathered that the best course of action would be to switch to the best accounts, to get the best saving rate for a year before switching again.

question 1) assuming I have a account with Santander 1 and HSBC 1, and then I switch, assuming that the best accounts 2 is Santander and HSBC as well...can you switch the Santander 1 to HSBC 2 and HSBC 1 to Santander 2. i ask this question because i can see it being weird if you're switching from one bank to have another account from a different bank, switching back to the first bank. I hope that question makes sense.

I do have other questions but that's the first I'd like answered. Thanks all

Archi_Bald

Switching can be good, but there is no rule that you have to switch after a year or other predefined timescale. The only current account that presently drops the interest rate after a year is the Nationwide FlexDirect. The others have variable rates that might or might not last for a year, or that might ask longer than a year - - it's a matter of watching the market, and of monitoring the interest rate change notifications that you will get from your provider. One great source for changes in the savings world is the MSE Forum.

You can switch your accounts pretty much as you like - provided the target bank will accept your application. Similar applies to simply opening new accounts, without switching. Switching is really only done for two reasons: 1 - to collate a switching bounty, and 2: to have DDs and SOs moved by someone else rather than doing it yourself.

Looking at your accounts: Natwest is largely useless for savings, and HSBC 's only attraction is their 6% Regular Saver for which you must hold their Advance current account. TSB, Lloyds, Tesco, BoS, Santander are at present generally a lot more useful to savers. Although M&S and First Direct also have 6% Regular Savers. You will find threads on all of these on the Forum.

shan735

Absolutely understand.
I am thinking of switching accounts once I start working so it's unlikely I'll have these accounts soon.

Just going by the "best interest paying accounts" when for example Santander 123 account states 3% interest between 3000 to 20000 or Lloyd's (if I remember correctly) 5% for 3000 to 5000...Once your money exceeds those amounts will the interest be paid for the first 20000 and 5000 respectively and then whatever variable rate for those exceeding those balance?

shan735

I will do more research once I'm home with a working pc. I broke my laptop whilst on holiday haha so using my phone atm

YorkshireBoy

shan735 wrote: »

Lloyd's (if I remember correctly) 5% for 3000 to 5000...

£4-5K

Once your money exceeds those amounts will the interest be paid for the first 20000 and 5000 respectively and then whatever variable rate for those exceeding those balance?

Zero interest on anything over those balances.

Archi_Bald

shan735 wrote: »

Just going by the "best interest paying accounts" when for example Santander 123 account states 3% interest between 3000 to 20000 or Lloyd's (if I remember correctly) 5% for 3000 to 5000...Once your money exceeds those amounts will the interest be paid for the first 20000 and 5000 respectively and then whatever variable rate for those exceeding those balance?

The amounts aren't quite correct but as a general rule, you can have as much as you like in an account but interest gets only paid on a specified maximum. The terms of the individual accounts are very clear and simple to understand, and it's them you have to rely on, not what I or some other stranger on the internet tell you.

shan735 wrote: »

I am thinking of switching accounts once I start working so it's unlikely I'll have these accounts soon.

Most of the best paying current account don't pay any switching bonus. Not presently, anyway. It's normally a choice of switching bonus or interest (exception: FlexDirect). If you read the forum, you will find that people do pursue both, the switching bonus and high interest paying accounts, usually quite independently.

Archi_Bald

YorkshireBoy wrote: »

£4-5K.

and it's only 4% not 5%.

YorkshireBoy

Archi_Bald wrote: »

and it's only 4% not 5%.

Whoops! Missed that.

Archi_Bald

YorkshireBoy wrote: »

Whoops! Missed that.

That's normally what I do, lol. Another reason why people need to use the official websites.

shan735

Nod nod. I will read closely to the terms. I was thinking what happens to interest if the money exceeds the specified maximum. If I were to switch to them I'll ask them directly to have a confirmation.

Yes I have begun reading the forums and am enjoying it haha. Im the sort of person who likes seeing their savings accumulate haha