Savings account with Direct Debit Option

the_goon

Hi

I want to find an account that will pay a decent amount of interest, but also allow me to set up a single direct debit.

Do these things exist?

I won't be paying into it regularly, just a single one time deposit.

Thanks

xylophone

The Tesco Internet Saver (1.5% for a year) would allow you to set up a DD.

colsten

The purpose of the DDs possible on this account is to deposit funds into the account. I don't think you can use the account to make outgoing payments by DD (e.g. to pay your gas bill) but I might be wrong.

It's not clear to me what type of DD the OP requires

the_goon

I need to pay an outgoing DD or standing order from an account with a decent interest rate. However, it won't be an account where I'll be paying in regularly.

ceredigion

Tesco's current account then.

colsten

the_goon wrote: »

I need to pay an outgoing DD or standing order from an account with a decent interest rate. However, it won't be an account where I'll be paying in regularly.

Tesco current account might well fit the bill. How much do you want to keep in the account?

What do you consider a 'decent' interest rate? I don't know of any savings account that pays what I would consider 'decent' interest. and I can't of the top of my head think of one that allows outgoing DDs. I have an old Egg account, now with Yorkshire Building Society, which allows regular outgoing payments, a sort of SO. This account is no longer open to new applications but they might be supporting this sort of thing with their other accounts but their interest rates are abysmal.

jimjames

the_goon wrote: »

I need to pay an outgoing DD or standing order from an account with a decent interest rate. However, it won't be an account where I'll be paying in regularly.

Many current accounts would meet that criteria as they pay far higher rates than savings accounts. As above Tesco is one that doesn't need payments in every month but pays 3%. If you're prepared to setup an SO payment in and out for £500 each month then you'll get 5% with TSB.

the_goon

Thanks for the suggestions, but the Tesco one is maxed at £3000 and TSB at £2000.

What I was hoping to achieve is this...

I have a mortgage balance of £30,000. My interest on my mortgage is extremely low, just base rate + 0.17% (0.67% currently). As I can get savings interest better than this, paying off the mortgage seems a bit daft.

I was hoping to put aside the £30,000 into an account that pays decent interest, and pay the mortgage out of that account, rather than paying it off. I would then have "technically" paid it off (as the money would be separate from my savings), but would reap some rewards in letting it ride, due to accruing interest at a higher rate than paying interest on the mortgage.

Hope that made sense.

colsten

Sounds a sensible idea, and current account are indeed the way to go. You can get 3/4/5% interest on up to £50K in various current accounts, and you could probably also make use of the 4/5/6% Regular Saver accounts.

Meeting any monthly minimum deposits is a doddle if you have £30k, as you can just move some money about by SO. Where you need any DDs, this can also easily be solved with a couple of Tesco savings accounts.

NB. You can have 2 Tesco current account, so that takes care of £6K. Add a TSB, may be a Nationwide, 3 x BOS and a Club Lloyds and you'll be all set.

Westie983

why don't you put the money in a savings account and then faster payment out to a current account to pay your mortgage each month, you could use your Tesco or TSB one as the extra money wont stay in the account so you will still have the interest, maybe the Tesco internet saver 1.6% into your Tesco current account each month.

colsten

Westie983 wrote: »

why don't you put the money in a savings account

Because you can get double the interest in current accounts? Just a thought.