Current Account/Savings Set-Up

MattFinucane

Hi everyone,

Watching this morning's MSE on telly has finally spurred me on to sort out my bank accounts and having trawled through this site, I think I've finally settled on a plan, though am eager to sense-check it with those more knowledgeable.

My Current Set-Up

I've had this since my mum set it up ages ago and have never tampered with it, hence it's not doing much for me (Note: these are relatively small sums, but it's more their idleness that's motivating the change).

Everyday Current Account (Santander): anything between £2,200 and £1 throughout the month, and I make fairly healthy use of the whole range.

E-Saver (Santander): £4,500 - £5,000 which I occasionally dip into or borrow from when the ECA's running low, but I always pay it back, and try to top it up occasionally.

'Bill Account' (ECA with Santander): completely redundant and empty.

(Apparently I have an ISA or two, but that's dead relatives' money which I neither understand or have much control over, in case that makes any difference).

My Plan

I am a 'recent graduate' by Santander's standards (Sep or Dec 2016) meaning I can get on their 123 Graduate Account (sorry, tried to hyperlink throughout but new accounts can't...), so I plan to change my ECA to that and at that point ~ascend~ to 123 status, meaning...

When I set up a Regular eSaver (Santander), transferring £200 pcm from a Santander current account, I'll get the 5% AER, or £64.33 pa maximum.

This will be fed its £200 from either my Bills or Graduate account. Either I will:
1. Transfer all the eSaver into the Bills Account and set up the Standing Order from there.
2. Keep it all in the eSaver, SA £200 pcm to either Bills or Graduate, then SA that £200 from there into the Regular Saver every month.

I think the latter is better, even if it slightly complicates my current account balance, and it leaves me free to explore other banks or accounts to move my eSaver money to, should I want to (as it's something like 0.15 AER...). At the very least, about half of that money could then be bringing in 5% AER, and maybe I could find a better place to put the other half while maintaining some 'safety net' functionality.

Would be really grateful for any of you clever people to comment and even suggest alternatives; I know I'm doing the stupid consumer thing of sticking with Santander out of convenience, but the 123 accounts boost is quite compelling...

YorkshireBoy

Seems to be centred too much around Santander.

Your £4,500 to £5,000 e-saver funds could go into Nationwide (£2.5K @ 5% AER for the first year) and TSB (£1.5K @ 3% AER), and then drip-feed £250 a month from TSB to a Nationwide Flexclusive Regular Saver. All your savings will be making 5% AER in no time.

The redundant Everyday account could be switched to NatWest for a £125 switching incentive.

What about a HTB ISA or LISA? (Both of which are unavailable to me, so others will be more knowledgeable)

xylophone

Apparently I have an ISA or two, but that's dead relatives' money which I neither understand or have much control over, in case that makes any difference).

You are of age - these are accounts personal to you - if you do not have control of them who does?

MattFinucane

Oh, they were set up 'by me', but are largely managed by my mum as they're entirely fed from inheritance money from her side of the family. I think it's just one HTB ISA.

MattFinucane

YorkshireBoy wrote: »

Seems to be centred too much around Santander.

Your £4,500 to £5,000 e-saver funds could go into Nationwide (£2.5K @ 5% AER for the first year) and TSB (£1.5K @ 3% AER), and then drip-feed £250 a month from TSB to a Nationwide Flexclusive Regular Saver. All your savings will be making 5% AER in no time.

The redundant Everyday account could be switched to NatWest for a £125 switching incentive.

What about a HTB ISA or LISA? (Both of which are unavailable to me, so others will be more knowledgeable)

Thanks so much - that's quite a lot to chew on and I'll definitely look into those options. Just two quick questions:

1. Wouldn't I need to maintain a hefty monthly pay-in to get the cash for my redundant account? (Or are you recommending that becomes my main account?)

2. Would I still be able to transfer savings into my current account instantly on a whim? Because that feature suits me, and is something I can bear not making a maximum possible return in order to keep.

Kim_13

The Natwest account requires £1,500 paid in by 16 March for the incentive, as per this MSE news story:
https://www.moneysavingexpert.com/news/banking/2018/01/natwest-launches-125-switching-offer---plus-you-can-get-2-cashback-on-bills-

You can just transfer the £1,500 in by faster payment from another account and then straight back out again if you wish.

All current accounts allow you to move the money as and when you like. Most Regular Savers also allow withdrawals, though most won't allow you to replace it without affecting the usual deposit limit. Nationwide does allow the money to be replaced however, so I would definitely recommend that one.

To move money away from a savings account with one provider you're likely to need a current account with them, through which the money can then be moved to a new institution. Most savings accounts can only be used for internal transfers.

colsten

Kim_13 wrote: »

To move money away from a savings account with one provider you're likely to need a current account with them, through which the money can then be moved to a new institution. Most savings accounts can only be used for internal transfers.

That's true for many traditional banks but not for the likes of Tesco or Birmingham Midshires savings accounts.

YorkshireBoy

MattFinucane wrote: »

2. Would I still be able to transfer savings into my current account instantly on a whim? Because that feature suits me, and is something I can bear not making a maximum possible return in order to keep.

"Whim" implies an impulse purchase (rather than inadequate budgeting) draining your day-to-day current account funds? So having all the cash earning 5% AER with Nationwide is a good thing...think of it as adding 5% to the ticket price. If you still think it's a bargain, then buy it.

Your £5K is making 0.15% AER at the moment. That's £7.50 a year. Taking the Nationwide option will see this rise to nearly £200 in year one (over £300 if you include the NatWest incentive). So it just depends on how serious you are about making your money work for you?

MattFinucane

YorkshireBoy wrote: »

Your £5K is making 0.15% AER at the moment. That's £7.50 a year. Taking the Nationwide option will see this rise to nearly £200 in year one (over £300 if you include the NatWest incentive). So it just depends on how serious you are about making your money work for you?

Challenge accepted! Will have to give this further thought this week, but I don't think I'll be doing the Santander thing any more.

Thanks so much for the replies, everyone.