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

YorkshireBoy

ciscosurplus wrote: »

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

"Worth it" is a very subjective thing, but since two people could get around £1,500 in a year from switching incentives, I'd most certainly say it was worth it.

Eco_Miser

ciscosurplus wrote: »

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.

I arrange all my cash to earn the most that is convenient (It's not convenient to open another account just because a few pounds isn't earning interest - it would be for £3000). I don't have a main account.

ciscosurplus

YorkshireBoy wrote: »

"Worth it" is a very subjective thing, but since two people could get around £1,500 in a year from switching incentives, I'd most certainly say it was worth it.

Indeed!

Most seem to be a one hit only, so probably worth going through the pain once.

does the switch bonus count towards tax? I'm a higher rate payer, my DW doesn't earn enough to pay any UK tax.

Priority one is closing the Lloyds

YorkshireBoy

ciscosurplus wrote: »

Most seem to be a one hit only

The current Nationwide RAF T&Cs allow for one payment per year, but obviously that could change.

Very occasionally (actually quite rare!) some providers write sloppy T&Cs which allow multiple incentive payments.

does the switch bonus count towards tax?

No, because it's a one-off payment, not an 'ongoing' one. At least that was the case the last time I checked the HMRC website.

colsten

ciscosurplus wrote: »

does the switch bonus count towards tax?

It doesn't. It's simply a discount on a service. Much the same as negotiating 5 years free service on your new £80K Merc - you don't have to declare that as taxable income either. Similar to getting a discount on your MOT or from your dentist or any other discounts you can think of - you don't have to pay tax on the discount you were able to negotiate.

Sam_J12

YorkshireBoy wrote: »

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.

Sure but I acknowledged that the rate you would be earning would only be for a short period of time. I then went on to provide an example where the saver earned 7% on his/her £10k over the entire year. Do you really not see this?

colsten

Sam_J12 wrote: »

Sure but I acknowledged that the rate you would be earning would only be for a short period of time. I then went on to provide an example where the saver earned 7% on his/her £10k over the entire year. Do you really not see this?

Interest rates are commonly expressed as AERs, i.e. the period of time to compare interest rates on are annual ones. I am not sure how any "short periods of time" would come into it - AER is AER.

This thread is about the best interest rates you can get for your money, not about the best return. I trust you comprehend the difference.

I - alongside everyone else , including yourself - can currently get a maximum of 6% AER from interest paying accounts. I can, like everyone else, get further returns from my money by other means.

Those other means might increase the return I get from my accounts, but they do not increase the interest rate I get from my accounts. Once again, I trust you comprehend the difference between interest rate and return on investment.

Some of these means are risk free (e.g. switching bonuses), some come with various levels of risk (e.g. matched betting, a favourite past time of mine).

YorkshireBoy

The little man on my left shoulder is saying try again, but George Carlin is on my right shoulder and he's saying don't bother.

colsten

George Carlin wouldn't be quiesced by a person questioning his integrity.

Special_Saver2

Hi Folks,

This is turning into quite an interesting thread. I wrote it for newbies but I am learning some stuff myself. I had not heard of the Co-Op or Barclays current accounts with cashback. I have added them in to the first post under the "free cash" section at the top. As I am adding those, I have also added the NatWest current account with cashback on bills that gives free cash if you pay out more than £1,200 in certain household bills using direct debit. The Santander 1-2-3 account is already mentioned separately.

I have also added a line at the bottom of the post about current account applications that include an overdraft application affecting ability to get credit and suggested spacing these applications out by a few months.

Do you think that these cashback payments are taxable?

The Halifax "Reward" is taxable - Halifax sends me a certificate each year for the interest to declare on my tax return. I think that one-off cashback (e.g. current account switching bonus) is non-taxable but that recurring cashback payments are taxable like interest.

SS2