Trying to understand basic mechanics..

mosephat

Hello..I'm totally new to this, so hoping for a little guidance on the basic mechanics of maximising incentives with current accounts etc.

I'm looking at the Nationwide Flexdirect, which pays "5% AER (4.89% gross p.a.) in-credit interest on balances up to £2,500 (fixed for the first 12 months)."

"You must pay in at least £1,000 per calendar month (excluding transfers from any Nationwide account held by you or anyone else) to get these rates"

What I'm trying to get my head around is...supposing I have £2500 in this account, and I have a direct debit to pay £1000 into this account from a different bank, and then take the £1000 back out of Nationwide into a different bank, does this meet the requirements for the 5% interest to be paid?

I have approx £10k to work with, so from what I'm reading, this appears to be a reasonably straightforward way to go about it. I am in a fixed mortgage deal that is up in 2 years, so I'm thinking if I can get a better deal by locking savings in for 2 years, then maybe that would be a good idea?

If anyone could point me in the direction of some sort of a guide to these sort of mechanics, I would be very appreciative.

Thank you!

Cornucopia

http://www.moneysavingexpert.com/banking/

There's more general info here:-

https://www.moneyadviceservice.org.uk/en/categories/saving-and-investing


Your plan (with the Nationwide) sounds fine. The mechanism by which customers move money between their own accounts is called a Standing Order (not a Direct Debit).

chockydavid1983

Yep, standing orders back and forth are pretty common to meet account requirements.
For some accounts, they also require a certain number of direct debits to be paid out. If you don't have enough to go around all the accounts you want, you can open Tesco internet and instant access savers and direct debit to yourself each month:
http://www.tescobank.com/savings/flexible/
It's worth getting the best current accounts for the amount of money you have and then use these to feed the best regular savers:
http://www.moneysavingexpert.com/banking/compare-best-bank-accounts
http://www.moneysavingexpert.com/savings/best-regular-savings-accounts
You can make quite a bit of interest over the year, especially with the personal savings allowance of £1k (£500 for higher rate tax payers)

Eco_Miser

mosephat wrote: »

What I'm trying to get my head around is...supposing I have £2500 in this account, and I have a direct debit Standing Order to pay £1000 into this account from a different bank, and then take the £1000 back out of Nationwide into a different bank, does this meet the requirements for the 5% interest to be paid?

Yes, but personally I would be sending £500 to my Flexclusive Regular Saver at the same bank (or rather Building Society), and £510 elsewhere. (You need to skim the interest off as well).