Savings

eileen_q

Hi, Ive been looking on this site for a while and I see you talk about saving in current accounts but I still don't understand how you o this. Ive had n account with my bank for years but what I cant fathom out is if I get my salary paid to my existing account and I open another account how do I finance the other account and subsequent accounts. Appreciate ay help given.

Romburner

If you take for example the TSB Current plus account. That gives you 5% on your balance up to £2000. All you have to do is pay in £500 per month to get the interest. In your case you would simply:

Set up a standing order from your 'salary' account to send £500 to the TSB account.
Set up a standing order in the TSB account to send that £500 back to your 'salary' account.

Anything that is in your TSB account will accrue 5% interest up to the maximum of the £2000 balance (anything over £2000 does not gain any interest).

escapee

It depends on your current situation eileen q. If the bank you have used for years isn't offering any reasonable return on your savings, you have the option of using the current account switching service, which means your new bank will take care of switching all of your incoming and outgoing affairs over to one of their own accounts. This process has been simplified recently and is said to take just seven days.

On the other hand, if you would sooner keep your existing account - you can open a second (or third, fourth etc) account with an alternative bank and fund this with money from your existing account. The easiest method of doing this, is to set up online banking - it is then a case of setting up your second account as a 'payee' on your main account and transferring funds over.

Whichever bank you choose, read and re-read the criteria before you commit. Most banks require you to have a certain number of direct debits set-up and to fund the account with a minimum amount each month. However, the money doesn't have to remain in the account, just merely 'rest' in there for a short period.

Hope this helps!

eileen_q

Thanks, I am not fussed re changing my account I was just confused at how you guys managed to have so many accounts and be able to feed them all. My hubby and I have 20k from sale of holiday home in Turkey but want to save for retirement in 11 years.

escapee

Depending on the banks used and the criteria involved.

If you're certain of your income - all you need to do is set up regular standing orders for funds to be transferred from account A to B, B to C, C to A etc etc. In this case, the accounts look after themselves with no further input from you (though it is wise to keep an eye on your statements from time to time).

escapee

The biggest 'hurdle' for most accounts is the setting up of direct debits (if you don't have many).

The majority of banks require you to set up at least two direct debits on your account as a condition of paying the level of interest. Though if you read through some of the dozens of topics on here, you will find novel ways of overcoming this in most cases.

jimjames

escapee wrote: »

The biggest 'hurdle' for most accounts is the setting up of direct debits (if you don't have many).

The majority of banks require you to set up at least two direct debits on your account as a condition of paying the level of interest. Though if you read through some of the dozens of topics on here, you will find novel ways of overcoming this in most cases.

Not strictly true. TSB and Nationwide have the highest rate at 5% and neither require any DD setup. Tesco pays 3% and doesn't either.