Slightly odd situation - how to save my money?

Ronoir

Hello all - I'm in a slightly complicated (to me!) saving situation so would be deeply grateful for some advice to add to the stuff I've read in the guides and threads.

I have £6050 sat in my Club Lloyds account, only earning interest up to £5000, so I need to do something with the excess. Any solution also needs to incorporate what to do with the £1200 I will be saving a month from here on. No debts/mortgage to pay off at this stage.

We are just in the process of looking to buy a house, so not only do I need to have access to the money, I also don't want to damage my credit score in any way (currently no issues).

The houses we are looking at are over the £250k threshold for H2B ISAs, and we are looking outside of London, so H2B doesn't seem to be that useful. Except, perhaps, that one or two pay good interest - but as it is calculated yearly this might not be much use? Bulk of the deposit is coming from elsewhere (work scheme), so not using up any allowances etc.

Opening another current account to take advantage of the offers seems the way forward but will produce a hard credit check on my file. I know one hard check was done last year for an interest free credit card, although clearscore etc aren't showing it anymore. Is this worth preserving for a few quid in interest? Suspect the TSB account will be the way forward here, as no requirement for Direct Debits etc.

However - the allowances will quickly be used up! The TSB allowance, for example, would be full by 2 April after my monthly saving goes in, so will require another opening, another credit check etc etc. Perhaps, therefore, it is worth going straight for a Santander 123 account and swallowing the hassle of changing a couple of Direct Debits. I could open it and get £3000 in there to start earning the 3% straight away (when paid), whilst keeping more than £4000 in the Lloyds, thus earning the top rate on both balances. This will also take care of the monthly savings going forward.

So - typing all that out has crystallized things a bit for me. It would seem opening a Santander 123 account is the way forward - but is there anything I've missed? Is a credit check at this stage a risk that I shouldn't be taking?

Very grateful for anyone that can spare a couple of minutes to type out a reply!

Ron.

unimaginative_user_name

One thing that stands out with the Santander is that with only £3000 in there your interest and cashback might easily get swallowed up by the monthly fee. A couple of Tesco's current accounts each would give you 3% on £12000 between you with no minimum pay in each month or direct debits. The other thing is the Club Lloyds regular saver which gives you 4% on £400 a month but that depends on how quickly you are planning to buy as I think you have to have it for a year to get the 4%.

I'm not an expert on credit scoring but I don't think opening a current account without an overdraft facility would have the same impact as taking out a new credit card.

I hope this helps. I suppose everything depends on how quickly the house move happens.

YorkshireBoy

The answer to your 'problem' is:

1. Open a Club Lloyds regular saver
2. Nationwide FlexDirect, and linked regular saver
3. TSB Plus, and linked regular saver

As there are two of you that's just one credit search each if you share the load.

All 3 regular savers have no withdrawal penalties.

And a bonus...you can shift £2K of your 4% cash into 5% accounts!

Ronoir

Got it - thanks to both of you.

YorkshireBoy - sounds like a plan. TSB Plus account duly opened, more to follow.

Thanks again.