Where to save?

combatrock

Hi All,

i currently have every one of my 4 (2 of which i actually use) bank accounts with TSB, i've always stuck with them for everything and i'm afraid i could be getting better rates elsewhere.

I have a savings isa which is gaining a pretty pathetic 0.5% interest (easy access type) and a graduate current account. I don't use any benefits of the current account (overdraft etc) and i pay in around 600-700 PCM. My savings isa has over 10k and i only need emergency access, not frequent access.

So i am looking for some advice on how to gain better interest and benefits from this money. I know that there are better ISA with new customer interest bonuses for the first year and also current accounts with switching bonuses and interest (i like the look of the santander 123 current account).

Can anyone help me out with some recommendations?

Archi_Bald

Your best bet are current accounts and regular savings accounts, according to http://www.moneysavingexpert.com/savings/which-saving-account and according to what lots of others here are doing.

combatrock

Thanks. Could you give me some personal recommendations for what you would do in my position? Specific accounts i mean.

Archi_Bald

I don't know enough about your personal circumstances to make any specific recommendations. It's easy enough to find the interest paying current accounts (e.g. by following the links at the top of the page) and to decide which one suits you best. There are also tons of threads on these accounts on the forum.

jimjames

You have 4 accounts with tsb and none of them pay good interest? How?

Tsb have the best paying account out there so it's impressive you've managed to avoid them!

combatrock

Jim, i have a current graduate account, classic current, isa (@0.5%) and an Esaver i don't use.

Archi, I think the 123 current account would be best for me. I figure on a balance of 10k i would get around £216 interest after tax and the fee (not counting any rewards i get). IS there any disadvantage to leaving that kind of money in a current account rather than a savings one?

Thanks all

combatrock

Also, can someone explain to me how tax works on current accounts? Is it paid annually? if i have two different current accounts with two different banks, will i be charged two lots of tax or only one?

Also if it is annual and i move all the cash into an isa before the end of the tax year will i still have to pay the tax?

eskbanker

Except for ISAs, interest is normally paid net of 20% tax whenever you receive it.

combatrock

is there anyway around this? i mean, if i use a 3% current account to stop my savings and have an empty isa allowance, is there anyway to avoid tax on the 3% current account using the isa allowance?

eskbanker

combatrock wrote: »

is there anyway around this? i mean, if i use a 3% current account to stop my savings and have an empty isa allowance, is there anyway to avoid tax on the 3% current account using the isa allowance?

No - you either put your money in a taxable account (in which case you pay tax on the interest) or in a non-taxable one such as an ISA (in which case you don't pay tax on the interest).

xylophone

Have you seen http://www.tsb.co.uk/current-accounts/classic-plus-account/

have you considered switching unwanted accounts for a switching bonus?