Maintain interest on 123 after £20k

liamsteven

Hi

On a 123 account the terms and conditions state that 3% interest is only paid on balances between 3k - 20k which means that interest payments will stop if the balance goes beyond 20k; the terms also state that one must deposit £500 into the account each month.

Does the interest stop? Can one simply keep the balance under £20k and transfer £500 into another bank and back into the 123 account? Is this legal and legit to do?

Alter_ego

It's what i do, although I pay the 2 direct debits and then transfer the rest.

anoncol

You still get interest up to 20k if thats what you mean. You dont need to transfer it out and back in, apart from the deposit requirements.

Legality doesn't come into it, its about the T&Cs of the account.

bsms1147

The interest does not stop when you reach £20,000. You simply don't get interest on bit of your savings that are over and above £20,000.

The method you describe for the £500 will satisfy the payment criteria.

liamsteven

Thanks!! That's good to know that I will still get interest on 20k which I am soon to reach.

I think I will transfer 2k to TSB Classic Plus each month to earn the 5% and then transfer the 2k back along with the ~ £85 earned.

bsms1147

The £2,000 needs to stay in the TSB plus for the whole month to earn a whole month's interest, which is 5% a year (before tax), so around £6.50 a month.

anoncol

£85? How?

ceredigion

^^^
I thought the same. No mater how I thro the figures around all incorrectly of course it don't come out at £85

Deru

Maybe liam forgot to take off the tax that'll be deducted?

anoncol

Deru wrote: »

Maybe liam forgot to take off the tax that'll be deducted?

Still a magnitude of 10 out.

Purplesky_2

Surely the cashback for various things can add up significantly?