Question about these savings accounts

I_Love_Saving_Money

I'm looking for the best place to put my savings. I came across this page:

moneysavingexpert.com/savings/best-regular-savings-accounts

The 'top rate linked accounts' have interest rates of 5-6% for 12 months. However, if I'm reading correctly, I can only deposit a maximum of £500 per month (for the Nationwide account) and as little as £200 per month for the Santander account.

So at £500 per month, I can only deposit a maximum of £6000 per year. Which I am forced to deposit in £500 chunks, instead of all at once.


Am I interpreting this correctly? If my interpretation is correct, this is a really poor deal.

YorkshireBoy

I_Love_Saving_Money wrote: »

So at £500 per month, I can only deposit a maximum of £6000 per year. Which I am forced to deposit in £500 chunks, instead of all at once.


Am I interpreting this correctly? If my interpretation is correct, this is a really poor deal.

So put your £500 a month in a 3% AER account instead then. Is that a better deal?


Or if you have £6K now (and have already filled the 4% & 5% current accounts), put it in a 3% AER account and drip feed the 5% AER regular saver from there...thereby getting an aggregate 4% AER.

eskbanker

I_Love_Saving_Money wrote: »

Am I interpreting this correctly? If my interpretation is correct, this is a really poor deal.

You're interpreting how regular saver accounts work correctly but misinterpreting their suitability for someone starting with a lump sum - they're intended for, well, regular saving, typically putting money away every month.

Probably worth reading the quick link above titled How to Start Saving to put the different types of account into perspective and working out which account (or combination of accounts, as per YB's post) suits your needs the best.

Eco_Miser

I_Love_Saving_Money wrote: »

Am I interpreting this correctly? If my interpretation is correct, this is a really poor deal.

It is an excellent deal for saving £500 (+£200 +
all the other amounts from the other regular savers) a month out of your salary. It also still beats just leaving your lump sum in a 3% account for the whole year.

King_Weasel

I'm a fan of these, simply because of the high interest. I drip feed several from other account(s) and try and spread the anniversary dates. M&S next for me.

realaledrinker

Note that both the accounts mentioned require the applicant to have a current account with the bank

eskbanker

realaledrinker wrote: »

Note that both the accounts mentioned require the applicant to have a current account with the bank

Also note that (if chosen correctly) both the relevant linked current accounts pay interest themselves (5% for Nationwide FlexDirect and 3% for Santander 123) so are well suited to holding lump sums for drip-feeding into regular savers, although some other current accounts do pay 4/5% or a clean 3% without monthly fees....