Save the change iniative

dannygoulding

Hi, I have a current account with TSB, and have just seen an iniative they have called 'Save the Change', whereby they round up any money spent or your debit card in a transaction to the nearest pound, and then pay the extra into your nominated account.


I think his could be fairly useful long term but am wondering what account would be best to pay the savings into initially? Seeing as it will generally be small amounts each time I'm not too worried about earning interest initially but mainly not being taxed on it, so was thinking a fixed rate ISA may be beneficial as no tax will be paid on it, and a little bit of interest will be earned. I understand a few fixed rate ISAs require a minimum deposit and am prepared to pay this.


Then in a year or 2, when hopefully the amount has built up I can invest it into a more lucrative savings account or ISA.


Any ideas on this or any alternatives??

Vortigern

dannygoulding wrote: »

Hi, I have a current account with TSB, and have just seen an iniative they have called 'Save the Change'...

Any ideas on this or any alternatives??

You would be moving 'the change' from an account where it earns 5% interest to an account where it earns much less than that?

Not for me.

jimjames

dannygoulding wrote: »

Then in a year or 2, when hopefully the amount has built up I can invest it into a more lucrative savings account or ISA.

Any ideas on this or any alternatives??

More lucrative than 5%? In a cash ISA? Which one?

As above I can't see the point

atush

i have this function on my US bank acct.

But it from a non interest acct (checking) to a low (but some) interest savings acct.

It would make zero sense to tke cash out of a high earning acct to a lower earning acct

dannygoulding

Vortigern wrote: »

You would be moving 'the change' from an account where it earns 5% interest to an account where it earns much less than that?

Not for me.

I should of explained that I have maxed out the £2000 allowance that earns 5%. Also this account gives me £5 back on my first £100 I spend using contact less, which I do every month. So I usually have more than £2000 in the account to earn the extra £5, and that extra doesn't earn any interest, so I am not to moving the change from high interest to low interest account. Hopefully that makes things clearer.

badger09

dannygoulding wrote: »

I should of explained that I have maxed out the £2000 allowance that earns 5%. Also this account gives me £5 back on my first £100 I spend using contact less, which I do every month. So I usually have more than £2000 in the account to earn the extra £5, and that extra doesn't earn any interest, so I am not to moving the change from high interest to low interest account. Hopefully that makes things clearer.

Then open another (high interest) current account and move the excess into that

MisterMotivated

dannygoulding wrote: »

I'm not too worried about earning interest initially but mainly not being taxed on it

I'd rather earn decent interest and be taxed on it than earn pitiful interest with no tax. As a few people have mentioned, there are a lot of accounts that will pay more interest even after tax than an ISA.

Also, from April, the first £1,000 of savings interest you earn will be tax free anyway (£500 for higher rate tax payers), making an ISA less worthwhile.

Vortigern

dannygoulding wrote: »

I usually have more than £2000 in the account to earn the extra £5, and that extra doesn't earn any interest, so I am not to moving the change from high interest to low interest account.

Do you have the TSB Monthly Saver Account? This pays 5% and requires a monthly deposit between £25 and £250

The "Save the Change" accounts are for those who can't resist the temptation to spend every last penny in their current account every month/week.

I have 2 TSB current accounts and one monthly saver, all paying 5%. Any excess cash above the account limit would be moved manually to an account earning not less than 3% (or spent contactlessly for the cashback)