Loan to put in saving account

Bartoszborowiak

I wondering, assuming that I will get cheap loan on 3.3% for £7500 and insert that into 5%saving account both for 12months wild I get a profit of 1.7%?

Sounds to me that something is not right these days with interest rates.

B.

bryanb

Where is the 5% savings account please? I want one!

Gaz83

You're not guaranteed to get a loan at 3.3%.

19lottie82

I also would like to know who is offering interest rates of 5% on savings accounts...... please tell!

jayII

19lottie82 wrote: »

I also would like to know who is offering interest rates of 5% on savings accounts...... please tell!

Nationwide regular saver: 5%
HSBC Regular saver: 6%
There are others.

TSB classic plus bank account and NW flex account offer 5%, but they're bank accounts not savings accounts.
Again, there are other high interest bank accounts.

Info is here http://www.moneysavingexpert.com/banking/

Pixie5740

jayII wrote: »

Nationwide regular saver: 5%
HSBC Regular saver: 6%
There are others.

TSB classic plus bank account and NW flex account offer 5%, but they're bank accounts not savings accounts.
Again, there are other high interest bank accounts.

Info is here http://www.moneysavingexpert.com/banking/

Yes you get regular savings accounts offering 5-6% but the OP wouldn't be able to deposit £7.5k in one go. He'd need to drip feed the accounts so he wouldn't really be earning 5% on £7.5 k over the year.

The OP could also use high interest paying current accounts but the amount that can earn interest is capped. For example TSB offer 5% on credit balances up to £2.5k.

So whether the OP is actually able to make 5% on £7.5k over the course of a year is debatable. That's before even accounting for tax on any interest earned.

jonesMUFCforever

There are indeed but you can not put lump sums into them - you start at zero then put in maximum monthly sum of say £400 per month so in month 2 you get interest on that amount etc.

iolanthe07

AFAIK there are no secure cash deposit accounts that offer anything like 5% these days. I get 4% on my Lloyds Classic current account, but only up to £5,000, and with certain conditions.

enthusiasticsaver

I have done the sums for you.

IF you can get a loan for £7500 at 3.3% (unsecured with no admin costs??) then it would cost you £247.50 in interest over 12 months. That rate sounds low so I doubt it is doable.

The only accounts which offer 5% are bank current accounts (which have all sorts of terms and conditions you need to comply with) or regular savers which involves you setting up regular payments and finding somewhere to put the money in while filling the regular saver monthly so you will not get the 5% flat on the whole £7500.

Easiest options are Nationwide Flex Direct and TSB (both have terms and conditions you need to comply with) and they at the moment offer 5% although this could decrease at any time. Maximum is £2k in TSB and £2.5k in Nationwide making yearly interest on £4.5k of £225. The remaining £3k could be put in a Tesco 3% saver earning £90 over the year so altogether £315. You could also look at using the nationwide regular saver which pays 5%.

Lots of ifs and buts and hoops to jump through though for a potential profit of £67.50 maybe slightly more if you use the flexclusive regular saver.

YorkshireBoy

Bartoszborowiak wrote: »

I wondering, assuming that I will get cheap loan on 3.3% for £7500 and insert that into 5%saving account both for 12months wild I get a profit of 1.7%?

Sounds to me that something is not right these days with interest rates.

B.

I think it's more your grasp of mathematics!

Due to repayments, your average interest earning balance over the year will be £3,750. It's therefore very obvious (isn't it!?) that you'd need to earn 6.6% on the savings just to break even...and you can't do that.

ollyshaw

If it's a regular saver you're not comparing like with like.

You'll pay 3.3% interest on the full amount straight away.
You'll get 5% interest on the small amount that's in the savings account.