Will this bank switch plan work please?

prezzacc

Hi All,

After lots of great help on this site and doing some research i believe i have come up with a plan to get the best of some of these accounts and the amount i can save. Can you see any problem with this:

1. Setup a new HSBC (My current main salary account) account and 2 Direct Debits.

2. Switch this account very shortly after to the TSB classic plus to get £130 switch. £5 month for 2xDD and £3% on £1500

3. Me & Wife Setup a Nationwide Flexdirect at 5% on £2500

4. Drip feed £400 a month from Flexdirect to Flexcusive at 5%.

I plan to move £1000 from main account to TSB for one day then to Nationwide for one day and back to my main bills account. Is that allowed or must the money sit in there for so long?

I cant quite work out how much interest that would be , but it seems the best i can figure out!

Thanks all

YorkshireBoy

3) Why joint?

4) Why move money from one 5% account to another?

Forget funding from your main account. Simply set up a pair of cross-firing £1K standing orders between TSB & Nationwide for the same day.


EDIT: Why can't you work out the interest? I told you on your other thread how it was calculated for Nationwide, namely £2,500 x 4.89%.

For TSB it's just a matter of substitution...£1,500 for £2,500 and 2.96% for 4.89% isn't it?

prezzacc

3 - I meant one each not joint.

4 - Well i was under the impression if i moved over to the regular saver and kept topping up the current account to £2500 id get more interest?

I understand the interest. I meant not sure how its calculated in the regular saver. Sorry if it seems obvious to you.

Thanks for the tip on the standing order. That makes things alot easier!!

YorkshireBoy

Your other thread said you had £4K. When you said TSB & Nationwide I thought that was a neat fit.

But it seems you can add to the savings each month. Must be more than £500 per month if you're opening 2 reg savers?

If you do only have £4K at the moment, and are opening 2 x FlexDirect (one each), why wouldn't you put it all in FlexDirect?...instead of sharing it with TSB paying around half as much interest (3% vs 5%) on little more than 1/2 the max balance on FlexDirect (£1.5K vs £2.5K).


EDIT: The regular saver interest can only really be accurately calculated (easily) for the same monthly payments over the term. If you deposited £500/mth it'd be:

£6,000 x 5% / 12 x 6.5

prezzacc

After a little bit of freeing up, its more like £6k. The amount paid in monthly extra is completely different but usually only 100-300 some months nothing. I did only plan to open the single reg saver. But two Current accounts.

Your making me think i need to go back to the drawing board!

YorkshireBoy

Best to clearly state your numbers, as you have done now.

So your question really is:

"We have £6K and will add £300 per month going forward. What's the best way to maximise the interest on this?"

To which the answer is:

A FlexDirect each (£5K)
A reg saver each (the other £1K is swallowed immediately)

Split the £100-300 monthly equally between the 2 reg savers.

All your cash is making 5% AER for a year...and you won't beat that anywhere else with cash.

If you want to protect yourself against not having any room for additional lump sum funds coming in a few months down the line, then run down the FlexDirects by emptying them into the reg savers.

Fund each FlexDirect with £1K from your main account via manual transfer each month as follows:

Main->Flex1->Main->Flex2->Main (all on the same day).

Treat the chasing of switching incentives as a separate activity. There's several £100s available here...probably £800 between you by the end of the year (£400 of it from Nationwide alone).

prezzacc

Hi,

Thanks for your help here. Really appreciate you taking the time.

That sounds good to me, the only thing im not sure of is the Manual transfer , do you suggest that as there is so many to move between? Id like to set up standing orders really but i guess the manual is done in 5 minutes.

Again thanks for the breakdown ill do some more research into switching also

CCDC

Just a quick one, without trying to hijack the thread . . how long does said balance need to be in the account for to gain the maximum interest? Eg. FlexDirect pays 5% upto £2500 . . how many days within that month does your balance need to be at £2500?

Thanks

TheShape

CCDC wrote: »

Just a quick one, without trying to hijack the thread . . how long does said balance need to be in the account for to gain the maximum interest? Eg. FlexDirect pays 5% upto £2500 . . how many days within that month does your balance need to be at £2500?

Thanks

To gain the maximum interest you'd need to have £2500 in there every single day as the interest is applied to the daily closing balance. The aim is to keep the account at or as close as possible to £2500 at all times.

bigadaj

CCDC wrote: »

Just a quick one, without trying to hijack the thread . . how long does said balance need to be in the account for to gain the maximum interest? Eg. FlexDirect pays 5% upto £2500 . . how many days within that month does your balance need to be at £2500?

Thanks

Between 28 and 31 depending on the month.