Santander Current Account v ISA

beachlou

Good evening,




I am weighing up what it the best option for our savings. We currently have a little over £7,000 saved so far this year and wondered whether we put it in a Santander current account or an easy access ISA? We can put it in my name as I currently do not work so I don't pay any tax if that is a factor.


Also we only switched banks to Halifax last year, can we just switch banks again?


Thanks.

Fruit_and_Nut_Case

beachlou wrote: »

Good evening,




I am weighing up what it the best option for our savings. We currently have a little over £7,000 saved so far this year and wondered whether we put it in a Santander current account or an easy access ISA? We can put it in my name as I currently do not work so I don't pay any tax if that is a factor.


Also we only switched banks to Halifax last year, can we just switch banks again?


Thanks.

You wouldn't need to switch. You can have both the Halifax and the 123 account. In fact it's a good idea to keep the Halifax account for the free £5 per month.

Archi_Bald

Although the 123 is a nice account, it doesn't seem the best one for £7K of savings - unless you manage to get at least £2/mth cashback from DDs. Other current accounts might suit better - e.g. Tesco, TSB, BOS, Lloyds.

You could have, for instance, £1.8K in a TSB Plus (5%), and £2,600 in each if two Tesco current accounts (3%). Bounce £750 once a month between these 3 accounts by SO, and you won't need t worry about skimming off interest for a couple of years.

Don't forget to register for gross interest

beachlou

Thank you for the replies. Would I be able to open multiple current accounts without needing to switch from my current bank (Halifax)? Also to get the interest would it just be a case of transferring the minimum amount from our current account across the different accounts? So, for example, on the 1st, move it to TSB, then the 2nd move to Tesco, then 3rd move it back to our current account?


Just having a quick look at the Santander cash back and in principal we could have £315 a year (taking the £7k that would stay in there into account) so it would cancel out the £24 annual charge. Not sure how good/disciplined I would be having the savings and current account in one place though.

beachlou

Ok, I've just opened 2 accounts with Bank of Scotland (one in my name, one in mu husband's). I hope I've done that right. What do I need to do not to be taxed on my account?

YorkshireBoy

beachlou wrote: »

Ok, I've just opened 2 accounts with Bank of Scotland (one in my name, one in mu husband's). I hope I've done that right.

Why have you chosen to pay tax unnecessarily? You should have opened two accounts in your own name (max is 3 sole).

What do I need to do not to be taxed on my account?

Read the T&Cs and other information on their website, where you'll see the process explained...

http://www.bankofscotland.co.uk/bankaccounts/pdf/classic-vantage-conditions.pdf

This bit...

Net rate [FONT=AvenirNext LT Pro Regular,AvenirNext LT Pro Regular][FONT=AvenirNext LT Pro Regular,AvenirNext LT Pro Regular]is the rate payable after the deduction of lower rate tax (which may be reclaimed by non-taxpayers on completion of an Inland Revenue R85 form). [/FONT][/FONT]

beachlou

Ah, did not see that I could open 3. Is it too late to close my husband's one? So I just need to open another in my name now then?


ETA: there is a 14 day cooling off period so will cancel it.

Archi_Bald

beachlou wrote: »

Thank you for the replies. Would I be able to open multiple current accounts without needing to switch from my current bank (Halifax)?

yes you can (but wouldn't get a switching bonus, obviously, if one was on offer)

beachlou wrote: »

Also to get the interest would it just be a case of transferring the minimum amount from our current account across the different accounts? So, for example, on the 1st, move it to TSB, then the 2nd move to Tesco, then 3rd move it back to our current account?

yes, as simple as that with TSB, Tesco and BOS. Some others (123, Lloyds) need DDs on top of monthly deposits


To claim gross interest, you need to give the banks an R85 form.

Archi_Bald

Don't forget you only get 3% AER in BOS if you keep a balance between £3 and 5K.

Whilst you can achieve that by splitting your £7K in the middle, 1 TSB Plus and 2 Tesco accounts (all in your name) would pay 3% on every pound you have in there.

You could even push the boat with 1 TSB, 1 Nationwide FlexDirect, and one Tesco account, again all in your name. That would give you 5% AER on £5,000, and 3% on £2,000 but only for a year as the FlexDirect 5% only lasts for 12 months.

Having said this, all the rates are flexible, so you have to keep an eye on the rates anyway.

beachlou

Thank you. I chose BOS mainly to avoid having to shift around any direct debits. I think I can about send over £1,000 p/m to each account :rotfl:

knack92

Archi_Bald wrote: »

To claim gross interest, you need to give the banks an R85 form.

Alternatively, in the case of TSB and BoS at least, you can request this by phone.