Need advise about my £20K

BUKI_2

I said it based on your nickname "yorkshire" but anyway !

Meant to say Current Accounts.


I read lot of threads before opening my own. If I did know everything - i would not ask a question

never the less, I already said that this is new to me and is not going in my head!

Based on the information provided you guys suggested to open 2 or more Current accounts (with high interest rate) and then keep transfering money between to fulfill the requirements etc.

however one I did not get is why Santander 123 is not prefered ot rather "one of the worst banks" although it seem to be offering highest rates.

??

YorkshireBoy

BUKI wrote: »

however one I did not get is why Santander 123 is not prefered ot rather "one of the worst banks" although it seem to be offering highest rates.

If you put your £15K in Santander your return would be...

(£15K x 3%) - £60 = £390

Now £390 on £15K equates to an interest rate of only 2.6%

So do you still think it offers "highest rates", bearing in mind all the accounts you've read about in the links provided earlier in the thread?

BUKI_2

I agree with only 15k with Santander but from what I read and seen; there is no other banks offering higher rater for 15k

TSB, LLOYDS etc only offer up to max 5k

anyway, i will go over the links and replies again.


cheers

Eco_Miser

BUKI wrote: »

I agree with only 15k with Santander but from what I read and seen; there is no other banks offering higher rater for 15k

Bank of Scotland pay 3% on £15k, without the £60 fee, though you've got to split it across 3 accounts.

BUKI wrote: »

TSB, LLOYDS etc only offer up to max 5k

Lloyds paid me 4% AER on £9800 last month.

BUKI wrote: »

anyway, i will go over the links and replies again.

The information is all there. Maybe try working some examples with pencil and paper (or a spreadsheet).

BUKI_2

Ok I am back for some thoughts.


I am thinking to open the following 3 Current Accounts:


1. Upgrade to Lloyds Club Card


- keep this card as my main current account for 5k
- have my wage £1,450.00 being paid in there every month + another £50 to £100 cash deposit
- earn about 3.93% which comes down to about £196.5 per year (about £16 per month)
- have 3 Direct Debits on monthly basis: car insurance, fitness and mobile




2. Santander 123 Current Account


- keep it mainly for savings e.g. £15,000.00
- set up another 2 Direct Debits (at minute I am stuck with 3 DD's only)
- earn £384 per year (£32 per month) 2.96% on 15K




3. Lloyds Monthly Saver OR TSB Classic Account Plus


not sure about the third one ...!!
TSB seems interesting, coming up to £100 per year and £8 interest per month.
Shame it is only limited to 2K only.




@Eco Miser "Lloyds paid me 4% AER on £9800 last month."

Is it the Lloyds Monthly Saver account you are referring to?
https://www.lloydsbank.com/savings/club-lloyds-monthly-saver.asp#tab-row-4

I thought you are only allowed max £400 per month, coming up to £4800 per year.
Note: it states the account will mature after a year and will change to Standard Saver


Finally -


will I not generate a bad credit score by opening many other accounts?
will those current account not start charging me after 1 year or something?!
will I not receive less rate if opening a current account with the bank within this month,
since they calculate the rates annually?

Eco_Miser

BUKI wrote: »

Ok I am back for some thoughts.


I am thinking to open the following 3 Current Accounts:


1. Upgrade to Lloyds Club Card

Not card, current account. If you keep using the wrong terms you'll confuse yourself, and anyone trying to help you. If you say 'card' most people will think 'credit card' - which is completely different.

BUKI wrote: »

- keep this card as my main current account for 5k
- have my wage £1,450.00 being paid in there every month + another £50 to £100 cash deposit

Doesn't need to be cash - fund it by Standing Order or Faster Payment from another account (most of the other accounts need funding too - this way meets both requirements.)

BUKI wrote: »

- earn about 3.93% which comes down to about £196.5 per year (about £16 per month)
- have 3 Direct Debits on monthly basis: car insurance, fitness and mobile

You don't need three DDs on that account - move one to another of your accounts,

BUKI wrote: »

2. Santander 123 Current Account


- keep it mainly for savings e.g. £15,000.00
- set up another 2 Direct Debits (at minute I am stuck with 3 DD's only)
- earn £384 per year (£32 per month) 2.96% on 15K

Less the £60 fee.

Using the Club Lloyds (£5000), TSB (£2000), Nationwide (£2500) and two Tesco (2* £3000), plus the Lloyds, TSB and Nationwide monthly savers, and not the Santander, you would have £3350 not earning interest in the first month, £2200 not earning interest in the second month and £1050 not earning interest in the third month, but earning 4 or 5% thereafter, and not be charged £5 a month. In the third and subsequent months you would fund the monthly savers from the Tesco accounts, thus getting 1 or 2 % extra on the transferred amounts.

BUKI wrote: »

3. Lloyds Monthly Saver OR TSB Classic Account Plus


not sure about the third one ...!!
TSB seems interesting, coming up to £100 per year and £8 interest per month.
Shame it is only limited to 2K only.

These accounts are different in purpose, I'd have the Club Lloyds Monthly Saver (note: Lloyds have other Monthly Savers at much lower interest) funded from the £15k in Santander, and the TSB Classic Plus (to get an extra 2% on £2k) and a TSB Monthly Saver (to get an extra 2% on an average of £1625 over the year)

BUKI wrote: »

@Eco Miser "Lloyds paid me 4% AER on £9800 last month."

Is it the Lloyds Monthly Saver account you are referring to?
https://www.lloydsbank.com/savings/club-lloyds-monthly-saver.asp#tab-row-4

I thought you are only allowed max £400 per month, coming up to £4800 per year.
Note: it states the account will mature after a year and will change to Standard Saver

Yes, plus the Club Lloyds current account with £5k in.

It has indeed matured, and I opened a new one the very same day as the old one converted to an Easy Saver (not a Standard Saver - that happens a year later). I also closed the newly converted Standard Saver that had been a CLMS three to two years ago.

BUKI wrote: »

Finally -

will I not generate a bad credit score by opening many other accounts?

No. It may worsen for six months to a year, but not significantly unless you already have other factors against you. The Regular Savers shouldn't have any effect as there's no way to get credit on them. If you don't ask for an overdraft on the current accounts, you'll only have a small credit risk - whatever they will allow as unarranged overdraft when you try to pay more than you have in the account.

BUKI wrote: »

will those current account not start charging me after 1 year or something?!

Why would they?
Santander and Lloyds charge from the beginning (and Lloyds rebates the charge if you pay £1500 in in the relevant month.
Nationwide stops paying interest after a year.

I've had the TSB and Lloyds accounts since they were announced, and haven't paid a penny yet.

There's nothing to stop any bank changing the conditions on an account, or withdrawing it completely, but that's no reason not to make hay while the sun shines.

BUKI wrote: »

... damn, had another question in mind to ask but it's gone now

It will be back.

BUKI wrote: »

will I not receive less rate if opening a current account with the bank within this month,
since they calculate the rates annually?

Told you.

No, the rates are expressed as an annual rate, but calculated daily and paid monthly.
There may be pennies difference in interest on interest - but not if you have maxed out the account.

BUKI_2

@EcoMiser


cheers for your reply though, having a bit of "brain-clash" trying to understand.
Oh and by the way, I already taken £60 from the Santanders 123 calculation


This is what I would get after the deduction: £384 per year (£32 per month) 2.96% on 15K


You lost me with this one:

Using the Club Lloyds (£5000), TSB (£2000), Nationwide (£2500) and two Tesco (2* £3000), plus the Lloyds, TSB and Nationwide monthly savers, and not the Santander, you would have £3350 not earning interest in the first month, £2200 not earning interest in the second month and £1050 not earning interest in the third month, but earning 4 or 5% thereafter, and not be charged £5 a month. In the third and subsequent months you would fund the monthly savers from the Tesco accounts, thus getting 1 or 2 % extra on the transferred amounts.

I understood that I need 5 Current Accounts (yes, current accounts not cards lol) but the rest was huh!! Guess you explained that if I did go with Santander and Lloyds Club - I would lose certain money (interest rate) per year??



Also, how can I open 2 same Tesco accounts ... ?! thought is restricted to one!

It has indeed matured, and I opened a new one the very same day...

Ah right, you can close it at the end and re-open same one again, cool!


My intention is to get most out of the interest rate really, and not using any over-drafts.
never had the reason to use overdraft anyway ...

Just worrying that I end up opening so many cards and then I mess it all up,
leading to loss of credit scores and not getting much out of it.






PS: Currently with basic Lloyds card and been told I am on rank 0 (top highest score).

Also, no I don't have any other reasons why I should have bad score ; bearing in mind - I never taken any overdrafts or loans or etc. apart from putting money in and saving. LOL - SAD LIFE huh

Thanks for your advise

xylophone

It is possible to have two Tesco current accounts and two savings accounts.

The savings accounts are useful because you can pull money into them with DDs.

YorkshireBoy

BUKI wrote: »

This is what I would get after the deduction: £384 per year (£32 per month) 2.96% on 15K

Why would you think that? I've already told you - in post #43 above - that you'll get £390 on £15K.

You've used 2.96% when you should have used 3% (as already shown above)...being as you'll benefit from compounding (interest on interest) as the account isn't full. And because the account isn't full, the £60 fee means you're only getting 2.6% AER (which may be improved upon by paying the right DDs from there).

Eco_Miser

BUKI wrote: »

Oh and by the way, I already taken £60 from the Santanders 123 calculation


This is what I would get after the deduction: £384 per year (£32 per month) 2.96% on 15K

It's only 2.56% after taking the fee into consideration.

BUKI wrote: »

You lost me with this one:

I understood that I need 5 Current Accounts (yes, current accounts not cards lol) but the rest was huh!! Guess you explained that if I did go with Santander and Lloyds Club - I would lose certain money (interest rate) per year??

Santander is the worst of the accounts that pay a reasonable rate (way better than those without promotional rates though), so it's worth avoiding them unless you can get your fees back in direct debit cashbacks, or you've got more than around £30k to stash.

If you go for the five current accounts and three regular savers I mentioned there would be £3350 of your original £20k not earning interest (or still earning 0.6% in your ISA). This would reduce by £1150 each month as you paid more into the regular savers. I haven't done the maths, but I think that would pay more than bunging £15k into Santander.

ETA: Done the maths - my way gets £954 in the first year.

BUKI wrote: »

Also, how can I open 2 same Tesco accounts ... ?! thought is restricted to one!

Apply for two, same applies to three Bank of Scotland accounts if you need to find a home for another £15k.