What would you do?

maton91

kidmugsy wrote: »

Open a current account at TSB paying 5% p.a. and open one of their regular savers too, paying the same rate. Study the T&Cs and ensure that you abide by them.

Thanks for your reply. I guess the only catch is me ensuring my balance stays at £2000, but that shouldn't be a problem if I know when my interest is paid.

I have seen the TSB Classic Plus Account but what other of their accounts pays 5% interest?

eskbanker

maton91 wrote: »

Is there anything stopping me form opening two Club Lloyds accounts?

Yes, the product Ts & Cs specify one per person (you can have a second if it's joint, i.e. three between a couple):

Customers may hold a maximum of one account with Club Lloyds benefits (either a Club Lloyds account or an Added Value current account with a Club Lloyds benefit package) in their sole name and one in joint names.

eskbanker

maton91 wrote: »

I have seen the TSB Classic Plus Account but what other of their accounts pays 5% interest?

http://www.tsb.co.uk/savings/monthly-saver/

maton91

eskbanker wrote: »

*Hyperlink to Monthly saver removed due to me being a new user*

Ah excellent, thank you for that.

My thinking so far is thus:

1. Open a TSB Classic Plus Account (5%) and ensure balance stays at £2000 (for my exisitng NatWest account)
2. Open a TSB Monthly Saver account (5%)and make regular deposits (for my existing NatWest account)
3. Open a Lloyds account (4%) for ISA savings and keep it to be within £4000-£5000
4. Make standing order transactions between the TSB Classic Plus and Lloyds account to waive membership fees

badger09

You still need to read the T&Cs of each of the accounts you are considering.

In the case of each of the two you have mentioned above, there are additional requirements in order to qualify for the interest.

maton91

badger09 wrote: »

You still need to read the T&Cs of each of the accounts you are considering.

In the case of each of the two you have mentioned above, there are additional requirements in order to qualify for the interest.

I will do, thank you.

Have I got this right: If I ensure I keep £2000 in an account at 4% monthly interest post tax and I satisfy all terms and conditions that I will be £96 better off per year?

Please correct if I am wrong

Archi_Bald

maton91 wrote: »

I will do, thank you.

Have I got this right: If I ensure I keep £2000 in an account at 4% monthly interest post tax and I satisfy all terms and conditions that I will be £96 better off per year?

Please correct if I am wrong

There is no such thing as 4% monthly interest. Interest is expressed as AER %, where the "A" stands for annual.

There is, to my knowledge, also no account at present that pays 4% on £2,000. If there was one, it would pay £80 a year gross, subject to income tax. So if you were a BR tax payer, that would be £64 in your pocket.


I reckon you need to do a lot more reading, and stop firing off random questions for a bit.

maton91

Archi_Bald wrote: »

There is no such thing as 4% monthly interest. Interest is expressed as AER %, where the "A" stands for annual.

There is, to my knowledge, also no account at present that pays 4% on £2,000. If there was one, it would pay £80 a year gross, subject to income tax. So if you were a BR tax payer, that would be £64 in your pocket.


I reckon you need to do a lot more reading, and stop firing off random questions for a bit.

Thanks for the response. I think I was getting confused with the 'interest is paid monthly bit'.

The TSB Classic Plus Account pays 5% AER, I have taken into account tax at 20% so therefore the equivalent interest rate is 4%. Ensureing I keep the balence topped up at £2000 and not go over I will be £80 better off (sorry I was wrong originally).

Archi_Bald

Actually, I was wrong, too. Apologies.

You must use the gross rate, not the AER, to calculate interest.

For the TSB Plus, the gross rate is 4.89% gross. Thus, assuming you meet all the requirements and keep £2,000 in the account at all times, a BR tax payer would get £78.24 interest in a year.

Taxation of interest will change next April, but it will be probably in your favour and it's not important right now.

maton91

Archi_Bald wrote: »

Actually, I was wrong, too. Apologies.

You must use the gross rate, not the AER, to calculate interest.

For the TSB Plus, the gross rate is 4.89% gross. Thus, assuming you meet all the requirements and keep £2,000 in the account at all times, a BR tax payer would get £78.24 interest in a year.

Taxation of interest will change next April, but it will be probably in your favour and it's not important right now.

Would you apply now or beging to look again in April?