My plan to get £500 in 2016

NectarCollector

Ok. £500 might not seem much to some people, but would be massive for me. All numbers are calculated from gross interest rates - not the AER that I quote here, and do not allow for the tax on interest change in April. So my actual interest earnings will be higher.

My current situation:

Total savings £8000, split in the following ways:

Santander 123 account: £5500 (planning to switch at the end of January)

I currently have £2500 in a Nationwide flexdirect (earning the promotional 5% interest until October). Which should yield approx £100 in the next 10 months before the rate falls to 1%.

I have just opened a Halifax help to Buy ISA at 4% and can save the maximum of £200/month in it, after 1 year will earn roughly £46 by the anniversary date in december

After ISA payments, bills, food shopping, allowing cash withdrawals every week I should have an average of £60/month spare (on a good month)

My future plan

Keep my Help to Buy ISA saving £200/month, £46 interest

I have recently applied for a TSB Classic Plus account, (I'm not really expecting to hear back until after xmas) in which I will keep £2k and earn approx. £97 interest. I will also use this as my main account to make purchases from due to the 5% cashback on contactless payments, maximum of £60/year)

In January I will switch my current account to Halifax rewards for the £100 switch bonus + £5/month bonus totalling £160, and keep the amount in this account as low as possible.

I will keep £2.5k in my Nationwide FlexDirect until October when the rate lowers. Estimated interest £100 by the time the rate ends, unsure where to put this £2.5k for the last 2 months of the year. as would only earn about £3 interest if I leave it where it is.

I will open a Tesco bank account and keep the maximum £3k in it, earning about £71
interest.

I will save £50/month from my spare cash each month in a TSB regular savings accounts, earning £14/yr

The remaining £500 will be kept as an emergency fund, and all minimum pay ins met with swapping money from account to account

Summary
£46 Halifax Help to buy 4%
£97 TSB classic plus 5%
£60 TSB 5% contactless cashback
£100 Halifax switch bonus
£60 Halifax £5/month
£100 Nationwide 5% (10 months)
£3 Nationwide 1% (2 months)
£71 Tesco 3%
£13 TSB regular saver 5%

Total = £550 (not accounting for the £1k tax free interest change in April)

Any thoughts? anything I'm missing? I will try to come up with a similar action plan in a years time, hopefully to make the banks pay me even more money!

This isn't counting the money I'll save from having switched energy supplier and ISP (Estimated saving of £240/year now I've switched)

Eco_Miser

So, you're going to split the £5500 currently in Santander into £2000 TSB @5%, £3000 Tesco @3%, and £500 undefined at 0%? With all interest except the HTB not being compounded?

I suggest you put £4000 (minimum to get the rate) in Lloyds Club at 4% and £1500 in TSB @ 5%, then move interest as it accrues to TSB. Don't open the Tesco account at this time.
This gets you more interest, and leaves room for extra saving, and any unspent part of your salary will also be earning interest.

Do your review for next year in 10 months time, just before the Nationwide rate drops. (If there's been no change to what's available, move it to a Tesco account, and the Lloyds account.) You can also drip the money in a 3% account into a 5% Monthly Saver then.

jimjames

Good plan. If you can recommend anyone to nationwide you'll both get £100.

I'd recommend having a high interest current account as your main account too. It means your getting maximum interest on all your money and avoids the situation where your balance falls too low for payments going out which might cause overdraft charges

YorkshireBoy

NectarCollector wrote: »

Ok. £500 might not seem much to some people, but would be massive for me.

You could get well over half as much again (and possibly 70% more) by playing the switching game.

Sam_J12

Seems like a great plan to me OP!

NectarCollector

Having had *some* sleep, I was thinking my £500 for emergencies, as it has to be in an easy access account, probably one of the online accounts for one of the many other banks, which are around 0.35%. Interest on that small portion is not as important as having the funds there immediately if needed for whatever reason. If I don't touch it at all in the next year (unlikely, but possible) I can add it to the interest earnings and reinvest £1k in a new account - whatever is available at the time.

If you can recommend anyone to nationwide you'll both get £100.

I had a Nationwide account up until April this year, and recommended it to a friend, sent a referral email.... but the numpty didn't click the link in the email and just went to nationwide site to open the account, so no one got the referral bonus!

This is also the reason my current Nationwide is a joint account, I can't open a sole Nationwide account again and receive the 5% interest within 12 months of closing a previous account.

YorkshireBoy

NectarCollector wrote: »

I had a Nationwide account up until April this year, and recommended it to a friend, sent a referral email.... but the numpty didn't click the link in the email and just went to nationwide site to open the account, so no one got the referral bonus!

There is no link to click in the confirmation e-mail Nationwide send out. Indeed they only suggest (in the email) that...

You might want to forward this email onto them as it contains some information about the offer’s eligibility and they will not receive a separate email from us.

I suspect what went wrong is that your 'friend' made their application BEFORE your referral form had been acknowledged by Nationwide (usually, but not always) next working day.

NectarCollector

YorkshireBoy wrote: »

There is no link to click in the confirmation e-mail Nationwide send out. Indeed they only suggest (in the email) that...I suspect what went wrong is that your 'friend' made their application BEFORE your referral form had been acknowledged by Nationwide (usually, but not always) next working day.

Sounds about right, knowing how impatient she is!

Maximum_Saving

Hello. I liked reading about your savings and I wish you lots of luck to save £500 in 2016. I think switching away from Santander is a very good idea because they will raise their fee from £2 to£5 a month. I suggest the Halifax because they give £5 a month. I like regular savers and have one at First Direct. I like the TSB account that gives 5 percent interest. Their monthly saver will be of interest to you as well.

YorkshireBoy

NectarCollector wrote: »

Sounds about right, knowing how impatient she is!

A 'grumble' (because it's not really a complaint!) to Nationwide at the time may have got you the incentive paid, especially since both your referral and their application (and subsequent qualifying switch) would have been time-stamped.

bsms1147

NectarCollector wrote: »

Having had *some* sleep, I was thinking my £500 for emergencies, as it has to be in an easy access account, probably one of the online accounts for one of the many other banks, which are around 0.35%. Interest on that small portion is not as important as having the funds there immediately if needed for whatever reason.

It would be just as easy to access in a 4 or 5% account.