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

mel48rose

colsten wrote: »

You haven't been able to get over 7% from accounts that pay interest for the past several years but you might think you did with the help of magic mushrooms.

:rotfl: :rotfl: :rotfl: :rotfl:

YorkshireBoy

colsten wrote: »

Can you do the numbers for that to surprise me, please?

Yes...but no "surprise"...

£4,100 (to make it up to £10K) from income fed into a pair of 6% regular savers would actually pull the aggregate down to 5.7%...using Sam's method of calculation. But I suspect you knew that.

Sam_J12

colsten wrote: »

that's not only interest, but I take your point (and would add switching bonuses and cashback etc)

The opening line of the OP says"People keep asking what is the highest interest rate you can with different accounts using a combination of current accounts and regular savings accounts if you are really dedicated and happy to move your money around". Clearly that includes the various fixed monthly payments that various banks pay (for example the Halifax £5 reward is taxed as interest) and the OP explicitly lists these accounts so the poster who says he could achieve 7% was making a very reasonable statement, as I demonstrated, and he was wrongly mocked.

colsten wrote: »

Can you do the numbers for that to surprise me, please?

Ok, you don't believe that you can earn 7% on £10k? Let's give it a go.

Allowing joint accounts for a couple, it is fairly trivial just by trebling the monthly bonus accounts.

If we allow cashback then it becomes trivial using the monthly £5 TSB cashback, £1.50 Coop cashback. HSBC regular saver etc. Similarly it is trivial with switching bonuses.

No cashback/switching/joint accounts? Still easily possible for part of the year:

£3000 at 6% in M&S regular saver. (£180)
£3600 at 6% in First direct saver. (£216)
Remaining £3400 in TSB Classic/Flexdirect at 5% (£170)
Barclays/Halifax/Coop - £4/£5/£4/month (£156)

(180 + 216 + 220 +156) x 100/10,000 = 7.22% on £10,000

Now clearly you can't have the maximum balance in the regular savers for the entirety of the year, but this example shows that in the final month of the regular savers, you will be earning 7.22% on your £10k.

Lets try and get that magical 7% over the course of a whole of the year without cashback/switching bonus/joint accounts:

£800/month full use of M&S/FD/HSBC regular saver @ 6% (£312) [Final balance will be £9600]
£500/month to Flex regular saver @ 5% (£30) [only for Jan-April, from 4% Lloyds]
TSB/Flexdirect @ 5% (£146.25) [Starting balance £4500, dropping by £800 July-Dec]
Lloyds Club @ 4% (£30) [Starting balance £4700 dropping by £1300 Jan-May]
£550 interest free FD/M&S/Coop overdrafts (£250/£100/£200 respectively) split between Lloyds club (4months)/Flex saver (8 months) @ 4%/5%(£25.67)
Barclays/Halifax/Coop £4/£5/£4/month (£156)

699.92 over the course of the year, so 6.9992%. I'll leave it there for amusements sake - the last 8p could be made in a variety of ways, for example taking the 4 month interest free overdraft in the standard fee-free Santander account.

Did I surprise you?

Sam_J12

YorkshireBoy wrote: »

Yes...but no "surprise"...

£4,100 (to make it up to £10K) from income fed into a pair of 6% regular savers would actually pull the aggregate down to 5.7%...using Sam's method of calculation. But I suspect you knew that.

Nope, 7% on £10k is achievable - see above.

Sam_J12

For some people, it is possible to get even higher rates. For example, a student/graduate who has access to a £3k overdraft can get another £120 or so in interest, plus if we allow the TSB/Coop cashback into the calculation we get an effective rate of 9% on that £10k.

colsten

Not got the time - or the inclination - to work through those numbers. I do see one basic flaw in this cunning scheme in that you'd appear to need 2 people to generate all that income but the proceeds aren't share out equally amongst two.

How does anyone make more than 7%, entirely from sole accounts, from their own £10K?

NB. May be you should learn about calculating the interest for drip-feeding regular savers?

Sam_J12

colsten wrote: »

Not got the time - or the inclination - to work through those numbers. I do see one basic flaw in this cunning scheme in that you'd appear to need 2 people to generate all that income but the proceeds aren't share out equally amongst two.

How does anyone make more than 7%, entirely from sole accounts, from their own £10K?

NB. May be you should learn about calculating the interest for drip-feeding regular savers?

The calculation is for just one individual. For two people it is trivial to get 7%. Using only current accounts and regular savers I have proven it is possible for one person to get a 7% return on their £10k, contrary to what you claimed earlier. This is with lots of harsh conditions too - no switching bonuses, no cashback, no student/graduate accounts.

The calculation for the drip feeding of regular savers is approximate but close - it is probably a few pennies/pounds out due to the difference between gross/AER but this doesn't change the overall conclusion. Any small shortfall is easily overcome by using the various small interest fee overdrafts that are available - for example the £8 you can get by putting the Barclays £200 0% overdraft into Lloyds classic more than covers the difference of any small error.

luvpump

Ratesetter, i got 4.8% for a year .

ciscosurplus

Many thanks for writing this.

One question, would you use one of the accounts as a main current account or use a separate account for this?

I currently have an old Lloyds account I use for spending etc, a TSB 5% in my wifes name (she isn't a tax payer) with £2000 and a Santander joint with £20000. My current account has another £12-15K on any given month, which earns less than £5 per month.

Also a lot of these accounts have bonuses for switching would if worth creating dummy accounts and then switching them to max the bonuses?

YorkshireBoy

Sam_J12 wrote: »

this example shows that in the final month of the regular savers, you will be earning 7.22% on your £10k.

Sam, you're moving the goal posts here.

In your original post you simply added up all the interest and rewards (that you'd suffixed "per year") and divided this figure by £5,900 (the amount you started out with) to get your 7.4% return £5,900.

I agree entirely with this. However, you simply cannot earn £180 & £216 in a year from M&S & FD respectively. Ergo you cannot use these figures to derive your % ANNUAL return on £10K.

Do you really not see this?

And finally, even if you had the other £4.1K in an interest earning account at the start of the year and drip-fed the 2 regular savers above, you STILL would not be able to achieve a return anywhere near your claimed 7%+ figure.