Current account interest vs savings

Lunalaws

Having some time off work I thought I would check my banking interests. So please help me confirm my choices.

Currently banking wages of £800 every 4 weeks so thinking of switching Current Account from Natwest 1.52% monthly to TSB Classic Plus 5.00% on account +£2000 (from Savings) with minimum £500 monthly deposits.

My existing Natwest Savings Account earning me 0.50% that's 98p every month on £3000. I'm thinking of switching £1000 to Nationwide Instant ISA Saver 3 with 1.40% variable paid annually and making regular monthly deposits.

I already have an old Nationwide Cashbuilder Account earning Gross 0.25% which I will be closing and a current Nationwide Instant ISA Saver 2 with Gross Interest of 1.40% with only £500 in.

YorkshireBoy

How much do you have in savings now, in total? (looks like £3.5K but just checking)
Any planned major spends over the next year?
How much will you be adding (in pure savings) each month?
How simple do you want things to be?

masonic

If your total savings are about £3,500, why not spread the lot between high interest current accounts? There are plenty of accounts with rates between 3% and 5% to choose from. You would probably only need 2 accounts in the short term (including TSB).

jimjames

Why bother with savings account when you're getting 5% in tsb? Add a nationwide account and you'll get 5% on £4500.

Lunalaws

Would a R85 form be useful to me once I have organised my accounts as I earn less than £15K a year?

Archi_Bald

Lunalaws wrote: »

Would a R85 form be useful to me once I have organised my accounts as I earn less than £15K a year?

Use this calculator to see what applies to you: http://www.hmrc.gov.uk/tools/r85/r85-2015.htm

Lunalaws

Thanks it says I am entitled but I'm not sure if I worked it out correctly. 5% per month with TSB on the £2000 totals £1200 per annum. 1.40% Nationwide ISA on £500 totals £7 per annum so probably best to close that as well.

Should I find a better paying monthly interest account on monthly deposits of less than £150 since I get nothing more from TSB Classic over the initial £2000.

I'm getting confused with my money makeover.

ViolaLass

Post 4 covered all your need, I thought.

AndyT678

Lunalaws wrote: »

Thanks it says I am entitled but I'm not sure if I worked it out correctly. 5% per month with TSB on the £2000 totals £1200 per annum. 1.40% Nationwide ISA on £500 totals £7 per annum so probably best to close that as well.

Should I find a better paying monthly interest account on monthly deposits of less than £150 since I get nothing more from TSB Classic over the initial £2000.

I'm getting confused with my money makeover.

No bank is going to pay you 5% per month to deposit cash and you will not make £1,200 in interest in a year on £2,000. The 5% is an annual number and you will make £2,000 * 5% = £100 per year in interest from your TSB account.

I think the other suggestion from jimjames was a Nationwide Flex Direct current account which will also pay 5% on £2,500 for the first year only.

enthusiasticsaver

Lunalaws wrote: »

Would a R85 form be useful to me once I have organised my accounts as I earn less than £15K a year?

You would now qualify for gross interest as you earn less than £15k so you can do that either by filling out an R85 or some banks allow you to register online. Santander does this but I am not sure if TSB does.