Having more than £20k in Santander 123 current account

colsten

philc27 wrote: »

You would make more savings interest if you kept the balance between £19k-£20k, rather than £20-21k (assuming you have another savings account for the rest of your savings). That's because the extra £1k could be sat in your normal savings account all year earning, say, 1.6%, rather than earning 0% in Santander.

Are you sure? I would suggest that keeping the bulk of your money in a 3% AER account, rather than splitting it into some in 3% and some in 1.6%, would pay you more for starters. Simply because 3 is more than 1.6.

If you want to make extra, skim off anything over £20K into another account. Preferably one that pays a lot more than 1.6% - there are at least a dozen of these about.

ztkr

colsten wrote: »

Are you sure? I would suggest that keeping the bulk of your money in a 3% AER account, rather than splitting it into some in 3% and some in 1.6%, would pay you more for starters. Simply because 3 is more than 1.6.

If you want to make extra, skim off anything over £20K into another account. Preferably one that pays a lot more than 1.6% - there are at least a dozen of these about.

You've missed my point. The subject of the post, Pincher, keeps £21k in their Santander account. They lose interest on that £1k over the interest limit. They would be better off putting that £1k in another savings account, and running the account slightly under £20k rather than slightly over - because 1.6>0!!

I used 1.6% as an example as it's around the best rate for a no strings, easy access savings account.

colsten

philc27 wrote: »

You've missed my point.

I didn't miss your point as you suggested they "kept the balance between £19k-£20k".

If you were meant to say that they should move everything above £20K into an interest paying account, I would naturally agree with you. There's also no need to keep the 123 balance 'slightly under' £20K, as exactly £20K will be the optimum balance :cool:

ManAtHome

But looks like Pincher could have close to £1,000 going out each month, so the attempt to make an extra £16 a year could easily be offset by the 123 balance being somewhere in the low £19ks for more than a couple of weeks a month.

I know we're supposed to 'squeeze the last groat', but sometimes life may be too short...

ztkr

colsten wrote: »

I didn't miss your point as you suggested they "kept the balance between £19k-£20k".

If you were meant to say that they should move everything above £20K into an interest paying account, I would naturally agree with you. There's also no need to keep the 123 balance 'slightly under' £20K, as exactly £20K will be the optimum balance :cool:

Pincher said that he/she kept their balance around £21k so that it didn't slip under the optimum £20k. Obviously it would be nice for that always to be the balance, but a 123 Account is active, the balance is always changing.

colsten

philc27 wrote: »

Pincher said that he/she kept their balance around £21k so that it didn't slip under the optimum £20k. Obviously it would be nice for that always to be the balance, but a 123 Account is active, the balance is always changing.

I have 4 active 123s, all of which have money going in and out all the while, and all of which are near enough £20K at the end of each day.

ztkr

colsten wrote: »

I have 4 active 123s, all of which have money going in and out all the while, and all of which are near enough £20K at the end of each day.

Four accounts? And all of them having money going in and out all the time, yet they still manage to stay close to £20k? Every day? How incredibly convenient.

Going back to Pincher's point, Pincher is losing interest on that money above £20k. Maybe it's only a small amount, but nonetheless I'd still put that extra money in a savings account where it's earning interest.

ztkr

ManAtHome wrote: »

But looks like Pincher could have close to £1,000 going out each month, so the attempt to make an extra £16 a year could easily be offset by the 123 balance being somewhere in the low £19ks for more than a couple of weeks a month.

I know we're supposed to 'squeeze the last groat', but sometimes life may be too short...

It's true. £16 is not a lot, but it's better than nothing!

And hey, squeezing the last groat is what MSE's all about! :cool2:

colsten

philc27 wrote: »

Four accounts? And all of them having money going in and out all the time, yet they still manage to stay close to £20k? Every day? How incredibly convenient.

Nothing difficult in keeping them all at £20K. Only major forthcoming adjustment is the drop in FSCS limit

bigfreddiel

Pincher wrote: »

I keep my account around £21k, so that the direct debits don't bring the balance too low. The interest keeps coming, for the £20k.

Ditto

fj