Sanity check on savings plan

CH2IS

Hello,

As I say, I'm looking to run my savings plan by the forum. I'm relatively new to this so there's a good chance I'm overlooking something. If you can point out any flaws – or a better course of action – I'm all ears and I'd appreciate feedback.

To give you a little background, I'm saving for a deposit on my first home. I'm squirreling away cash because I want certainty and quick access. I've switched to a First Direct current account for day-to-day spending (and the £100 bonus). Joint accounts, and any with direct debit requirements, are out so I'm planning to do the following with...

£1,000 a month to save:
:: £200 – Halifax, Help to Buy Isa (4%)
:: £300 – First Direct, Regular Saver (6%)
:: £250 – M&S, Monthly Saver (6%)
:: £250 – TSB, Monthly Saver (5%)

£10,000 saved:
:: £1000 – Halifax, Help to Buy Isa (opening deposit)
:: £3000 – Tesco, Current Account (3%)
:: £2500 – Nationwide, Flexdirect (5%)
:: £2000 – TSB, Current Plus (5%)
:: £1000 – First Direct, Savings Account (TSB and Nationwide minimum monthly requirements)
:: £500 – Tesco, Current Account No 2 (for future savings, work bonuses etc)
:: £0 – M&S, Current Account (for monthly saver)

One thing concerning me is potentially taking a credit rating hit for opening so many accounts. I've no debts or credit cards, I'm looking to buy in two-three years and none of the accounts will have overdrafts. Do I have anything to worry about?

Regards,

Chris

imjayw

CH2IS wrote: »

:: £1000 – First Direct, Savings Account (TSB and Nationwide minimum monthly requirements)

A lot of what you are doing is similar to what I am currently doing.


I'd just like to note that you do not need to keep depositing £1000 every month in your FD account; and is probably best suited in another high interest rate account.


I, and others on this forum have opened an e-saver on First Direct, popped in £1 and that will cover the monthly requirement.

Eco_Miser

Tesco Internet Saver and Tesco Instant Access both can be funded by generating direct debits from multiple current accounts in the same name. Thus you can also get those current accounts requiring direct debits, even though you don't pay any bills by direct debit. e.g. Lloyds Club £4-5k & £400 pm at 4%.

Even without that, put £500 pm in the Nationwide monthly saver at 5% - that takes care of the £500 you've earmarked for Tesco 2, and, over a period of six months, the £3000 in Tesco 1. You don't need the £1000 In First Direct either.
You can vary both the Nationwide and TSB monthly savers when you run out of money in lower paying accounts.

Otherwise, you're doing fine.

oftm

CH2IS wrote: »

One thing concerning me is potentially taking a credit rating hit for opening so many accounts. I've no debts or credit cards, I'm looking to buy in two-three years and none of the accounts will have overdrafts. Do I have anything to worry about?

No, I've been doing similar for 5 years and now in the process of buying a place. I have about 20 accounts, some with overdraft even though I don't use it yet got my mortgage approved within two weeks so just keep at it and you'll get there.

Futuristic

For maximum interest I would replace the Tesco account with Lloyds and put the £1k from FD to it as well which will receive 4% interest on balance up to £5k.

You can then use the Lloyds account as your primary banking as you can fill it up to 5k. Also use this as the account for making the SO in and out from TSB/Nationwide which will then meet the £1.5k/month requirement for the Lloyds account as well.

You'll need 2 DDs for Lloyds however easily achieved through a instant saver from tesco / charities.

Once you exceed the £5k limit then simply open a Club Lloyds saver to funnel excess to:
http://www.lloydsbank.com/savings/club-lloyds-monthly-saver.asp



Opening multiple accounts will decrease your "rating" for the short term due to the amount of searches performed, as you've just started to save it's likely you won't be applying for mortgage for some years so you will be fine.

Kendall80

As mentioned above you seem to have a handle on it. Just replacing that tesco 3% account with a club lloyds 4% account (maintaining 4k-5k balance) would be my only suggestion.


I wouldnt be overly concerned about opening a large number of accounts. Many on here have 10+ and some including myself have numerous 0% credit cards also.

themanfromamarillo

One thing, you mention using the FD account for spending, at the moment TSB are doing 5% off your 1st £100 of contactless spending per month.

lynnejk

Evening all


Hoping you could help ?


Will I earn more over the next 12 months by leaving £3000 in an account earning 3% paid monthly or by feeding it into a monthly saver which will pay 5% at end of 12 months ?


I know it's not a big deal but every extra penny in my pocket seems the right way to go eh and saving for retirement.


Thanks
Lx

colsten

lynnejk wrote: »

Will I earn more over the next 12 months by leaving £3000 in an account earning 3% paid monthly or by feeding it into a monthly saver which will pay 5% at end of 12 months ?

Dripfeeding the monthly saver from the current account is the best answer. http://www.moneysavingexpert.com/savings/best-regular-savings-accounts#dripfeed

lynnejk

colsten wrote: »

Dripfeeding the monthly saver from the current account is the best answer. http://www.moneysavingexpert.com/savings/best-regular-savings-accounts#dripfeed

Thanks a million for the prompt reply and advice
Lx

CH2IS

Thanks for all your comments so far. It's helping me fine tune everything before pushing the buttons.

As suggested: I will open a Lloyds account instead, using the Tesco DD trick. Tempting as the TSB 5% contactless deal is, using cash over cards saves me more – it maybe the most important change I've made.

I'm glad I posted because it seems I'm not going too far wrong and, as suspected, I was overlooking something: I don't have to separate that £1,000. It seems obvious now!

A few more questions: what's the best method for moving the monthly minimum? I've read you can cycle it same day. How does that work? Any traps to be aware of?

Thanks again.

Edit: I gather that I can simply set up standing orders for the same day, like so...

:: £1,000 Lloyds to Nationwide
:: £500 Lloyds to TSB
:: £1,000 Nationwide to Lloyds
:: £500 TSB to Lloyds

Are minimum requirements total amounts? (ie can I split the Lloyds £1,500 as above?)