First post :) High interest Current accounts

piujade

Hi all!

So, this is my first ever post on this forum. I am 25, live in London, recently got married, and also got a new, well paying job. I am looking to start saving for the both of us..target is £500/per month or more if possible!

1. Have looked at opening a high interest current account each - Nationwide - 5% for the year for £2500, so that covers us for £5000.

2. So, do I have to ensure we reach £2500 on both accounts and then leave it there for the year? I am aware of the minimum monthly pay-ins. Again, can this be in two payments, or two payments of £500?

3. My OH doesn't pay tax, so should I open the first account under her name, reach £2500 and then open another account?

The accounts I am interested in are:

NATIONWIDE.
TSB

I would appreciate any help at all...as we are looking to save over the next 5 years for a deposit (hopefully).

Many thanks!

YorkshireBoy

Nationwide would cover you for £7,500 @ 5% AER.

TSB would cover you for £6K @ 5% AER.

Should keep you going for a couple of years at £500 / month!

Fill hers and the joints before your own.

masonic

piujade wrote: »

2. So, do I have to ensure we reach £2500 on both accounts and then leave it there for the year? I am aware of the minimum monthly pay-ins. Again, can this be in two payments, or two payments of £500?

The minimum funding can be met using a single payment or multiple payments.

3. My OH doesn't pay tax, so should I open the first account under her name, reach £2500 and then open another account?

That depends how much you trust your OH

NATIONWIDE.
TSB

I would appreciate any help at all...as we are looking to save over the next 5 years for a deposit (hopefully).

Many thanks!

Don't forget the 6% regular savers (First Direct, HSBC etc). If you are saving monthly from income, then these will be quite useful.

piujade

Hi there,

Thank you! :T

So, to gain maximum interest possible, the accounts should be topped up to the max limit and left for 12 months?

I'll start off with Nationwide - 3 accounts in total to begin with, reach a total of £7500.

Is it only after this that I should open the TSB accounts, or any others. This could take us in mid 2016?

piujade

Hi Masonic,

I do trust her implicitly I am the financial head of the household - which is just me, her and the cat.

I am looking to go for firstdirect regular saver to stash away my tax, as I am working on a selfemployed basis, so need to put away between £100-250 a month, anyway! Might as well, make some money out of it.

Good idea?

Thank you This website and forum has been a blessing!

Birdwell

YorkshireBoy wrote: »

Fill hers and the joints before your own.

Why? I mean does it matter?

piujade

Hi Birdwell,

I think, it does...because..she pays no tax, so would earn more interest. My interest would be taxed, so it would affect the amount at the end of the 12 months - between £20-40 - max amount saved over a year. I may be wrong, but I do this is the reasoning.

x

YorkshireBoy

Birdwell wrote: »

Why?

To save tax.

I mean does it matter?

Not if you'd rather the Government had it.

YorkshireBoy

piujade wrote: »

I'll start off with Nationwide - 3 accounts in total to begin with, reach a total of £7500.

Nationwide is 12 months only, so you might want to start with TSB and wait for Nationwide (and hope it's still around then).

masonic

piujade wrote: »

I am looking to go for firstdirect regular saver to stash away my tax, as I am working on a selfemployed basis, so need to put away between £100-250 a month, anyway! Might as well, make some money out of it.

Good idea?

Yes, and it will be especially good for you because the interest will be paid in the next tax year, when the budget changes should mean you'll earn that interest tax free.

In answer to your other question, I might be inclined to load up your OH with both Nationwide and TSB accounts first, since she is in a more favourable tax position - in that case it doesn't matter how you spread the money between the accounts, but obviously anything exceeding the £2500 / £2000 cap for interest won't earn anything. Then get the joint accounts, then the sole accounts in your name. Once the new tax year comes along, you'll be on a more equal footing. so the order won't matter from that point.

piujade

Good idea!

Going to open a TSB account for her next month, which is likely to fill up in 3months, and then can open a joints, and then under my name finally.

Hopefully these great 5% rates are around even after a year or so.

x