5% interest easily obtained?

Leon2

So I had a look at the TSB Classic PlusPlus account which gives 5% but requires a minimum monthly pay-in of £500. I've just started to get interested in savings accounts so my question is:

since withdrawals are permitted, is it correct to be under the impression that you can deposit £500 a month and take it back out straight away (or even better, take out £500 from your £2000 and then deposit it straight away)?

ColdIron

Yes it correct to be under that impression
You can do it with standing orders

Leon2

It might be my bad research skills but there's so little about this online, I mean people could make several hundreds by just moving money around right?

castle96

People could (and have) made several thousands by doing just that. There is LOTS of info on THIS site....

DominicH

It takes a modest amount of effort to set up and monitor these things. Like many on this forum I have several of these accounts (TSB, Nationwide, Lloyds etc.), set up so that the necessary steps occur on roughly the same day of the month (swapping money back and forth between the accounts, direct debits, and so on.)
It takes me 10 to 15 minutes, one day a month, to make sure everything is in order (yes, I have timed it .) Occasionally more than that if, for example, terms and conditions change on one of the accounts and you have to do something about it.

Of course, we're only talking about an increase of two or three percentage points on savings of maybe £10,000, so perhaps £360 a year gain if we include the £5 a month from Halifax Reward. It's up to you if the modest amount of hassle is worth it. Around 15 minutes of effort for up to £30 gain, per month. If you're the sort of person who already keeps on top of your finances, then it's like a free £30. If not, then you might be better off expending your energy on, say, improving your career prospects, or finding other expenditures that you can save on. Either way, exploiting these high interest accounts is certainly not the road to riches.

Kendall80

Leon2 wrote: »

It might be my bad research skills but there's so little about this online, I mean people could make several hundreds by just moving money around right?

Yes thats what many of us are doing. Personally, I made about £800 out of current account interest this past 12 months. I'm sure others may have made much more. Next on your list would probably be Nationwides 5% Flexdirect account. My 3 have just expired (12 months only).

garf155

Just coming to the end of my 12 months with TSB and Nationwide. What do people recommend doing - closing the accounts or just transferring everything out and leaving them empty?

colsten

No need to do anything about your TSB account as it will continue on the 5% AER (variable).

The FlexDirect needs to be switched / closed / downgraded to a FlexAccount so that you can re-open another FlexDirect at 5% in 12 months time, assuming they will still offer it then. A switch, if there are offers you haven't done yet, would obviously the most financially attractive option.

Harveys_2

Hi how many nationwide accounts can you have paying 5% ?

Thank you.

colsten

As can be read on the Nationwide site:

Opening multiple FlexDirect accounts:

Under the terms and conditions of this account customers are only entitled to one promotional credit interest rate of 5% AER. (4.89% gross p.a). The only permitted exception to receive more than one promotional rate is if the additional account is held in joint names.

Any additional FlexDirect accounts held or more than one joint account held by you and another customer will result in the credit interest rate being reduced from 5% (4.89% gross p.a) to 1% gross p.a/AER (variable) within 7 working days of the account being opened.

If you have previously held a FlexDirect account in the last 12 months, you will not be entitled to the introductory rate or offer under a new agreement and therefore you will receive the standard 1% gross p.a/ AER (variable) interest rate.

http://www.nationwide.co.uk/products/current-accounts/flexdirect/rates-fees-overdrafts-ot?lc=1#xtab:twistyitem3