What is the Highest Interest Rate / Cashback / Rewards You Can Get?

Special_Saver2

Thanks, I have updated the first post of this thread accordingly (and removed the Bank of Scotland account given the imminent interest rate drop).

I have also updated the Santander Regular eSaver (for 123 or Select customers) from 3% to 5% for new account holders who are eligible to open the higher interest version.

SS2

Stressmonkey

Hi - I've a 123 account and am going to open a Santander eSaver as the 5% rate obviously beats the 1.5% current account rate. But as it's a regular (monthly) saver only the first £200 attracts the annual 5% with each subsequent payment earning a little less and the 12th would only be in the eSaver for a month so would (and correct me if I'm making daft assumptions) only attract one twelfth as much. If I had well over the £20,000 limit gathering 1.5% interest it wouldn't matter, but like most 123 customers, I don't, though I do have enough to cover 12 x £200.

So what is the cross over point at which I would make less interest on my £200 transfer than if I'd left it in the 123 account at 1.5%?
ie how many of the max 12 payments would be worthwhile?

If you could "show your workings" that would be ideal as I also want to make use of Nationwide's 5% / £250 per month eSaver.

Thanks for help and patience in equal amounts

darkidoe

Stressmonkey wrote: »

Hi - I've a 123 account and am going to open a Santander eSaver as the 5% rate obviously beats the 1.5% current account rate. But as it's a regular (monthly) saver only the first £200 attracts the annual 5% with each subsequent payment earning a little less and the 12th would only be in the eSaver for a month so would (and correct me if I'm making daft assumptions) only attract one twelfth as much. If I had well over the £20,000 limit gathering 1.5% interest it wouldn't matter, but like most 123 customers, I don't, though I do have enough to cover 12 x £200.

So what is the cross over point at which I would make less interest on my £200 transfer than if I'd left it in the 123 account at 1.5%?
ie how many of the max 12 payments would be worthwhile?

If you could "show your workings" that would be ideal as I also want to make use of Nationwide's 5% / £250 per month eSaver.

Thanks for help and patience in equal amounts

You will always make more interest in the regular saver earning 5% interest than leaving it in the 123 earning 1.5% interest. Just following your example to say the 12th payment being in the eSaver for only a month, earning only 1/12 of as much of the interest (5%), the alternative of it being in the 123 account the same time (1 month) would be 1/12 of the current account interest (1.5%). Hence just have a regular standing order to move £200 into the regular saver every month from the current account.

Eco_Miser

All 12 are worthwhile, each month £200 earns 83p in the 5% account, but only 25p in the 1.5% account. That applies to the last month as well as the first.

To be clear, each month's contribution still earns interest at 5% AER, but for a shorter period. Conversely the money not yet in the regular saver each month earns interest at 1.5%.

bigadaj

The other issue with small amounts in a 123 account is the monthly fee, if this isn't covered by cashback then it will reduce your effective interest rate and could mean the account costs you money on small savings.

darkidoe

I have abandoned Santander all together and switched to Halifax to get a switch bonus. Unless you have large enough cash balance filling up the 123 and then gaining access to the 5% regular saver, it is not worth the hassle.

To be honest, the same goes for most of the current accounts who dropped their interest rates to 2%. But we haven't got much choice have we?

YorkshireBoy

darkidoe wrote: »

I have abandoned Santander all together and switched to Halifax to get a switch bonus. Unless you have large enough cash balance filling up the 123 and then gaining access to the 5% regular saver, it is not worth the hassle.

Switching to 'Lite' wasn't an option then? Not a householder and therefore able to generate some cashback?

darkidoe

YorkshireBoy wrote: »

Switching to 'Lite' wasn't an option then? Not a householder and therefore able to generate some cashback?

I am a renter and don't pay household bills. Only cashback would be a mobile sim only deal costing £12 per month which would not generate enough to justify the fee.

A product not suited to me.

jackb17

Does anyone have a 2019 updated answer to this?!