What savings options am I missing?

matty_art

Hi all,

I'm well versed in the current account savings routine, but with the fall in my Nationwide and YB accounts interest recently, I'm just about at the point where I'm out of options. I'm saving medium termish as I don't know circumstances in a couple of years - I have a c£50k mortgage at 2.39% variable but looking to rent this out soon as I am living with my partner and may look to buy somewhere larger together with my partner in a few years.

I currently have
Santander 123 x 1 (and. 2 yr fixed isa with 1 year left)
First Direct + reg saver
YB rate fallen, switching to M&S and reg saver
BOS vantage x1
club Lloyds x1
TSB X1
Nationwide flex but rate fallen - but I have flexclusive ISA at 1.5% with £14k so need to keep it
No ISA contributions made for this tax year.

I'm considering starting mortgage overpayments soon with my excess, and dipped a touch into a s&s isa low risk mutual fund with mix of government bonds and corporate, but nervous about going further there. I also haven't tried P2P as it's still a bit of an unknown to me.

Are there any savings options I've missed (eg can I open another TSB account?) or maybe I should overpaying the mortgage especially if I might have an interest increase once I start letting?

bowlhead99

Another **BoS Vantage** account or two (max 3) is an option, as is the Club Lloyds regular saver at 4% on £400 per month.

Remember once you start renting out your place, the interest cost becomes a business expense, reducing your profits and income tax bill. So the effective interest rate cost is not so high as the headline rate might sound on paper, because of the "tax shield" effect. Lots of people (effectively, your business rivals) will be financing their business investment through mortgage as it's quite efficient. And paying it down will sacrifice your flexibility as you usually can't then pull the money back without remortgaging.

If you feel able to take some investment risk with a portion of the cash, then further investment funds would be an option, and they or the various P2P opportunities would reasonably be expected to generate an improved return (over the longer term) than a fully insured bank account. But these are not risk-free options that qualify as "savings"; they are investments which carry investment risk in the pursuit of a superior reward.




**edit- for some reason I wrote TSB instead of BoS when I retyped it all out for the second time on my train this morning after the phone lost my message... TSB like most of them only allows multiple accounts if you have a willing partner to do a joint account, while BOS lets you have multiple "sole" Vantage accounts ; Vortigern/Colsten, thanks for pointing it out.

Vortigern

OP could use another 2 x BoS Vantage.

colsten

bowlhead99 wrote: »

Another TSB account or two (max 3) is an option

Only if the partner gets involved. Max number of sole TSB Plus accounts has been 1 for some time.


As Vortigern says, there is the option of another 2 BOS Vantage accounts. Also 2 x Tesco.

There is also the HSBC Regular Saver, as well as £100 on the "Safe Together" - see separate thread.

Then there is the Halifax fivers, as well as a switching bonus. I think there are also various other switching offers still around, such as the Coop one.

Minor point: Flexclusive ISA is 1.6% for new ones, and they accept transfers in. Not sure whether 1.5% was a typo - if not, I'd ask Nationwide to be on 1.6%.

matty_art

Yes, that was a typo, thanks.

This information is very useful; I'd not actually taken into consideration the tax deductable element of interest payments, so it makes sense not to pay off until my gross interest return is below my gross mortgage rate, at least for now. I'll have a look at another BOS, I forgot to say that I've also got a Club Lloyds regular saver.

Edit: Am I right in thinking that to get the switching bonus on Halifax and Coop, you also need Direct Debits set up? Mine are all set up on my 123 account to attract cashback and I have 2 Tesco bank DDs set-up for Club Lloyds - are there others that can be done?

colsten

matty_art wrote: »

Edit: Am I right in thinking that to get the switching bonus on Halifax and Coop, you also need Direct Debits set up? Mine are all set up on my 123 account to attract cashback and I have 2 Tesco bank DDs set-up for Club Lloyds - are there others that can be done?

You are right, you need DDs tow switch to Coop. For Halifax, you just need DDs for the monthly fivers. At least that was the case when I last looked at the T&Cs - you better check the current status as they do change from time to time.

If you already have 2 Tesco savings accounts, getting additional DDs is the easiest thing on earth. Just pull in some money from your other relevant other current account(s).

jimjames

colsten wrote: »

You are right, you need DDs tow switch to Coop. For Halifax, you just need DDs for the monthly fivers. At least that was the case when I last looked at the T&Cs - you better check the current status as they do change from time to time.

Not just transferred but active for the entire time before payment of the switch bonus.

matty_art

colsten wrote: »

You are right, you need DDs tow switch to Coop. For Halifax, you just need DDs for the monthly fivers. At least that was the case when I last looked at the T&Cs - you better check the current status as they do change from time to time.

If you already have 2 Tesco savings accounts, getting additional DDs is the easiest thing on earth. Just pull in some money from your other relevant other current account(s).

Can you have the savings accounts linked to more than one current account then? They're linked to Club Lloyds at the moment to keep those going. In fact I haven't actually got any accounts to switch currently, unless I open a new one just to switch but that seems a little nefarious (especially if you have to go through it on the phone like with M&S!)

Jsscmm

Tesco savings accounts can have multiple dds coming in... Very handy.

On the topic of tesco.. 2x current account can be opened for another home for 2x 3k @ 3%.

Westie983

my tescos internet saver pulls money from 6 of my current accounts, just set up via the add money section of the internet banking...