Current Accounts for Savings - Excess Money over Max Amount for Interest

20vt-rs

Hi all,


Following on from querying what t do with my ISA, I am seriously considering removing it all to put into high interest current accounts. I will end up with several to the tune of:


Santander 123 3%
TSB Classic x2 (Joint & Sole) 5%
Nationwide Flexplus 3%
Tesco Bank 3%


I will have approximately £28k spread over the three, all of which will be at the maximum limits for each account to earn interest.


My query is, what do you do with the excess money over and above the maximum amount to earn interest? As this will be increasing as interest is paid. Is it worth opening another high interest current account and every 2-3 months move the excess from each account into that?


Thanks...

YorkshireBoy

You appear to be settling for 3% AER when the two of you could get 4-5% AER on the whole £28K...unless you already have those higher paying accounts?

Paully232000

YorkshireBoy wrote: »

You appear to be settling for 3% AER when the two of you could get 4-5% AER on the whole £28K...unless you already have those higher paying accounts?

I am in a similar situation with rubbish ISAs and savings accounts. Now getting around to moving it and as you seemed to suggest I can get more interest I have a question or two?

I have just opened a TSB account for 5% on £2000.
What are the others I could be opening?

Also, I don't have that many Direct debits to pay each month and I see some of the current accounts ask for two or three per month per account. Is there a way around this?

and as to the £500/£1000 credit needed for some of the accounts, can I just move money around to still get the account % interest. ie £1000 from TSB to account A, then from account A to account B etc etc??

jennifernil

Yes, internal transfers are fine.

If you need direct debits, you can open a couple of Tesco savings accounts, they will pull money by direct debit.

We have the TSB 5% accounts (6 in total) , Club Lloyds (2) that pay 4% (2 DDs), BOS Vantage (3) that pay 3% (no DDs needed), and a Santander 123 which we use for the excess interest, and also get the Cashback on Council Tax and utilities DDs, which covers the £2 monthly fee.

We also move money monthly into regular savers....

First Direct £300pm @6%, M&S, 2 x £250pm @5% (I think), and Club Lloyds 2 x £400pm @ 4%.

bowlhead99

What are the others I could be opening?

Other than what was listed in the first post, the obvious ones with top rates are Nationwide, 5% on their flexdirect account up to £2.5k for the first year; Lloyds is 4% on their club account (between £4k and £5k) and they have a 4% regular saver for another £400 a month. There is also a Halifax one where you get a fiver a month irrespective of account balance, if you meet the T&Cs, so that is a much bigger % rate given the account can have virtually nothing in it most of the month.

As noted above you can get more than one account if you have an 'other half' ; either a joint account, or one in each name, or both - depending on the T&C of each bank. Some of them (like Lloyds and Santander) only start to pay the top rate once you exceed a certain balance so if you are moving a lot of money around between them all, try to stay in the right range.

My query is, what do you do with the excess money over and above the maximum amount to earn interest? As this will be increasing as interest is paid. Is it worth opening another high interest current account and every 2-3 months move the excess from each account into that?

It's true that if you exceed the top threshhold you won't earn interest on the rest. So, just keep your account a bit below the level where you would run out of space when the monthly interest arrives, rather than literally maxing out all the accounts. This might lead you to have another current account or some saver account elsewhere to store the surplus.

Presumably you will be cycling money in and out of the accounts each month to meet the minimum criteria for deposits in a month. So, just transfer in (e.g) £500 and out (e.g.) £520 to pick up and take away the interest earned to stop going over the limit.

and as to the £500/£1000 credit needed for some of the accounts, can I just move money around to still get the account % interest. ie £1000 from TSB to account A, then from account A to account B etc etc??

yes

Also, I don't have that many Direct debits to pay each month and I see some of the current accounts ask for two or three per month per account. Is there a way around this?

I don't think that there are any on three. But some don't need any. Once you have gone through all your utility bills, phone bills etc, you can look at small charitable contributions or other things like paypal where you don't need to be buying the exact same products all the time to trigger a direct debit.

An obvious one is a DD set up from your own savings account - not all people offering savings accounts support this, but some banks like Tesco allow you to go into your account settings of the savings account and set up a direct debit to fund it, so you can literally pull through cash from another bank's current account from the Tesco end rather than sending it from your own bank as a standing order. This way you don't pay anyone external and still meet the T&Cs for having active direct debits of a few pound a month.

Archi_Bald

jennifernil wrote: »

Yes, internal transfers are fine.

Not at Nationwide and Santander. You will get no interest if you do not follow the T&Cs.

But it would be fine to swap money between e.g. the FlexDirect and the 123.

20vt-rs

YorkshireBoy wrote: »

You appear to be settling for 3% AER when the two of you could get 4-5% AER on the whole £28K...unless you already have those higher paying accounts?

I'm trying to keep things simple for me, I already have these accounts so want to utilise fully:
Santander 123 3%
TSB Classic x1 (Sole) 5%
Nationwide Flexplus 3%



These will be new for the excess of the above being maxed:
Tesco Bank 3% (Going for this because I already have a c/card)
TSB Classic x1 (Joint) 5% (I cant open any more of these)


The only account I could go for that I am aware of that beats the 3%'ers is the Lloyds Club account? But I'm happy to sacrifice the 1% to keep it simplified.


Have I missed anything else?

jimjames

20vt-rs wrote: »

My query is, what do you do with the excess money over and above the maximum amount to earn interest? As this will be increasing as interest is paid. Is it worth opening another high interest current account and every 2-3 months move the excess from each account into that?

Thanks...

Once you have that much cash is it worth using s&s ISAs for the additional money? Or is it needed short term?

YorkshireBoy

20vt-rs wrote: »

I'm trying to keep things simple for me, I already have these accounts so want to utilise fully:
Santander 123 3%
TSB Classic x1 (Sole) 5%
Nationwide Flexplus 3%



These will be new for the excess of the above being maxed:
Tesco Bank 3% (Going for this because I already have a c/card)
TSB Classic x1 (Joint) 5% (I cant open any more of these)


The only account I could go for that I am aware of that beats the 3%'ers is the Lloyds Club account? But I'm happy to sacrifice the 1% to keep it simplified.


Have I missed anything else?

Your plan would seem to be OK then. Use such as Tesco for any spillover since the 3% isn't dependant on interest tiers.

However, it'll still need monthly funding...which might put you off as its not "simple". On that subject, you may as well open a 5% account rather than a 3% account. After all, you'd nearly double your return for the same 'effort'!

20vt-rs

YorkshireBoy wrote: »

Your plan would seem to be OK then. Use such as Tesco for any spillover since the 3% isn't dependant on interest tiers.

However, it'll still need monthly funding...which might put you off as its not "simple". On that subject, you may as well open a 5% account rather than a 3% account. After all, you'd nearly double your return for the same 'effort'!

Ok thanks for clarifying, what other 5% accounts are there? I'd have the maximum 2x tsb's. Is it the flex direct account you mean which is 5% for 12 months? I'm after a longer term one if poss...

MARTYM8`

20vt-rs wrote: »

Ok thanks for clarifying, what other 5% accounts are there? I'd have the maximum 2x tsb's. Is it the flex direct account you mean which is 5% for 12 months? I'm after a longer term one if poss...

TSB Classic plus - you only need to pay in £500 a month and no DDs required but the 5% is paid on balances up to £2,000 only.

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