Direct Debit Dilemma?

Kim_13

Helen28 wrote: »

But they don't give me 1.5% interest on my >£16000 balance.

You are correct, Santander 123 Lite and Natwest Reward do not pay any interest, but they would save you either £36 or £48 in account fees per year, depending on which (if either) you chose.

Your balance could earn interest elsewhere, such as 3% on £7,500 between TSB and Tesco, and 2% on £5,000 with Club Lloyds. Nationwide FlexDirect will also give you 5% on £2,500 for a year if you haven't already had it. Nationwide and TSB do not require any Direct Debits to receive interest. You could use a standing order to move the money for bills into your bill paying account just before the DD's are due to be taken.

As you can see from this MSE best savings accounts guide, it's possible to get 1.3% with no fee, so it may be better to do that than pay the extra account fees for 1.5% interest: https://www.moneysavingexpert.com/savings/savings-accounts-best-interest

If you don't want to have to worry about moving money around for bills each month, you might prefer to get the TSB Classic Plus that I mentioned and pay your DD's from that. They offer 3% on £1,500 and £5 per month for 2 DD's paid out for the rest of 2018.