Piggybanking

edp33

Hi

I have only just come across piggybanking, i know, where have i been all these years.......

Basically i have 2 accounts i actively use, santander 123 and a standard hsbc account from over 30 years ago with no perks. I also have a halifax rewards account which i just put 750 in every month for £3cashback then transfer it back again. I also have over £9k savings in santander 123 gaining 1.5% interest at the moment which i should split into savings accounts with better interest

Would my best option be something like this?

Close hsbc account

Transfer all my income to halifax then set up a standing order to transfer enough income for bills into santander 123/natwest below

Downgrade santander 123 to 123 lite or switch to natwest(extra 2 a month in cashback from utilities and a switching one off payment)

Then create some regular saver or instant access accounts for holiday, clothes etc? And set up more standing orders from halifax/income account to these? Im fine with minimum payments but dont want to be locked in for 12 months before i can withdraw

I did think of changing hsbc to advance account but they dont pay switching fee for existing account holders.

The other thing that would be great is to view all my accounts in no more than one or two banking apps, i..e having multiple saving accounts in same bank, not sure if regular saving accounts allow this?

Thanks for any feedback!

EachPenny

I would keep the 123 account but set up the linked regular saver earning 5% - so long as you are comfortable with the T&C's regarding access to your money if you need it.
Edit:Keep you salary/income paid into this account, rather than one you might switch later.

I would leave the Halifax account as it is for now. You earn £3 per month for not doing very much, you could organise the pay-in by standing order if you wanted to make it easier.

I would switch the HSBC account to one offering an incentive. Right now the best is probably the NatWest one as there is no knowing when they might have another switch offer when/if the current one ends. There is also no requirement to have direct debits, so you won't have to worry about setting any up on the HSBC account. You'll need to more reasonably quickly on the NatWest offer though.
https://forums.moneysavingexpert.com/discussion/5772997

Katiehound

and unless you can access one or 2 regular savers paying 5% interest generally savings accounts are paying less than current accounts.

Keeping the HSBC (with a minimum in it) proves banking history if that's the one you have had for 30 years-You could upgrade to Advance for access to the 5% regular saver

It depends what you have in capital available for these accounts. It would help you in the future to have at least one donor account for a switching bonus.In other words don't close any accounts you already have.
Switch to Nationwide- with refer a friend- see referers board you each get £100- then 5% on £2.5k for the first year+ access to 5% RS
or 2 x Tesco current accounts- 3% on £3k(each) until April 2019 but I think you need 3 x DDs for each
TSB Classic Plus

RG2015

I don't understand the term "Piggybanking" despite reading the MSE main site page on this.

Could someone explain it in simple terms please?

Kim_13

RG2015 wrote: »

I don't understand the term "Piggybanking" despite reading the MSE main site page on this.

Could someone explain it in simple terms please?

It's essentially using multiple bank accounts in the place of traditional piggybanks, so one account for bills, one for spending money, one for holiday savings, one for Christmas or whatever.

The accounts chosen would be arranged to get additional perks when the accounts are used as intended - so a Santander 123/123 Lite/Natwest Reward is commonly chosen for a bills account to allow the earning of cashback on household bills; TSB, Nationwide, Tesco, BOS or Club Lloyds for savings due to the interest paid. Co Op, Tesco and TSB (if qualifying for the offer) offer something back when spending with the debit card.

Kim_13

edp33 wrote: »

Hi

I have only just come across piggybanking, i know, where have i been all these years.......

Basically i have 2 accounts i actively use, santander 123 and a standard hsbc account from over 30 years ago with no perks. I also have a halifax rewards account which i just put 750 in every month for £3cashback then transfer it back again. I also have over £9k savings in santander 123 gaining 1.5% interest at the moment which i should split into savings accounts with better interest

Would my best option be something like this?

Close hsbc account

Transfer all my income to halifax then set up a standing order to transfer enough income for bills into santander 123/natwest below

Downgrade santander 123 to 123 lite or switch to natwest(extra 2 a month in cashback from utilities and a switching one off payment)

Then create some regular saver or instant access accounts for holiday, clothes etc? And set up more standing orders from halifax/income account to these? Im fine with minimum payments but dont want to be locked in for 12 months before i can withdraw

I did think of changing hsbc to advance account but they dont pay switching fee for existing account holders.

The other thing that would be great is to view all my accounts in no more than one or two banking apps, i..e having multiple saving accounts in same bank, not sure if regular saving accounts allow this?

Thanks for any feedback!

To earn the best interest on your money, it should be spread over additional current accounts/regular savings accounts as this will allow you to beat the 1.5% paid by Santander 123 without paying a £5 monthly fee. However it would mean moving the money for bills into the bill paying account just before the bills are due. This can be done manually by faster payment or automated with a standing order, however some prefer not to have this hassle and retain the standard 123 as it pays the cashback and some interest.

You are correct that the best approach for a bills account is to choose between the Santander 123 Lite at £1 a month with the usual tiered cashback and access to a 5% Regular Saver taking £200 per month or the Natwest Reward for £2 a month and a flat 2% cashback on bills. If you opt for the Santander route, you can still bag the Natwest £125 by opening and switching to the free Select account.

Accounts paying better interest without the need for direct debits are the Nationwide FlexDirect paying 5% on £2,500 for a year and providing access to a Regular Saver at 5% taking £250 per month. Also TSB Classic Plus for an ongoing 3% on £1,500. There are others but they would require Direct Debits. As with the DD's on a Halifax Reward it's best to have non cashback earning DD's on these if you can. Nationwide run a 'Refer a Friend' incentive giving £100 to you and £100 to someone who refers you.

If you haven't had it since January 2012, Halifax pay a switching incentive to switch into a Reward account you already hold. It has been £125 in the past so you may wish to hold off on this one to see if it goes up.

The MSE guide to the best bank accounts may help: https://www.moneysavingexpert.com/banking/compare-best-bank-accounts

You can open additional accounts for the purpose of switching them for a bonus if you wish, though you would need to check the terms to see if the accounts needed to have DD's on to qualify for a given incentive. Some accounts will also take back the incentive if you don't keep the account for a specified period after receiving it.

RG2015

Kim_13 wrote: »

It's essentially using multiple bank accounts in the place of traditional piggybanks, so one account for bills, one for spending money, one for holiday savings, one for Christmas or whatever.

The accounts chosen would be arranged to get additional perks when the accounts are used as intended - so a Santander 123/123 Lite/Natwest Reward is commonly chosen for a bills account to allow the earning of cashback on household bills; TSB, Nationwide, Tesco, BOS or Club Lloyds for savings due to the interest paid. Co Op, Tesco and TSB (if qualifying for the offer) offer something back when spending with the debit card.

Thank you.

Your first paragraph sounds like different pots for different purposes and would have been my first guess. It would not work for me as I see my ready money as just one pot wherever it is held

Your second paragraph makes much more sense for me personally and I do this anyway to chase the best vehicle for perks, rates and service to meet my needs. However I am not sure that the term piggybanking applies equally well to both of these descriptions.

There do appear to be many financial terms, both traditional and newer that are both esoteric and confusing.

Katiehound

Kim_13 wrote: »

Accounts paying better interest without the need for direct debits are the Nationwide FlexDirect paying 5% on £2,500 for a year and providing access to a Regular Saver at 5% taking £250 per month. Nationwide run a 'Refer a Friend' incentive giving £100 to you and £100 to someone who refers you.

Last year when I switched into Nationwide using the Refer a friend scheme I needed 2 x DDs & £1k payment per month. After the switch I was able to remove the DDs!
Maybe the t&cs have change / or change from time to time!

Kim_13

Katiehound wrote: »

Last year when I switched into Nationwide using the Refer a friend scheme I needed 2 x DDs & £1k payment per month. After the switch I was able to remove the DDs!
Maybe the t&cs have change / or change from time to time!

The incentive needs the DD's, receiving the 5% interest for a year doesn't. Both require the minimum pay in to be maintained though.

edp33

Thanks for all the replies. What makes it a bit more tricky is the hsbc account has child benefit and rent paid in from my tennant. Where as my salary is paid into santander 123. I didnt want to mess my tennant around by changing banks, but likewise hsbc isnt offering anything that makes me want to keep it.

Currently i use santander for bills and savings at moment, and hsbc for general spending, groceries,


I think based on your comments and my research this is best

Income is collected in both hsbc and santander 123
Downgrade santander 123 to lite to save monthly cost
Transfer 200 a month from santander 123 to the santander regular saver 5% this can be a holiday pot or similar
Transfer money after bills taken off from santander 123 and hsbc to a new nationwide flex direct account at 5% my wife and i can have this as our spending account, then send a further 250 a month to a new nationwide 5% reg saver, anything else can go in santander esaver accounts

Halifax i might cancel or keep to make 36 a year just from transfering in and out

Might also join nationwide flex plus for an extra 3% saving and the perks for 13 a month

Kim_13

edp33 wrote: »

Thanks for all the replies. What makes it a bit more tricky is the hsbc account has child benefit and rent paid in from my tennant. Where as my salary is paid into santander 123. I didnt want to mess my tennant around by changing banks, but likewise hsbc isnt offering anything that makes me want to keep it.

Currently i use santander for bills and savings at moment, and hsbc for general spending, groceries,


I think based on your comments and my research this is best

Income is collected in both hsbc and santander 123
Downgrade santander 123 to lite to save monthly cost
Transfer 200 a month from santander 123 to the santander regular saver 5% this can be a holiday pot or similar
Transfer money after bills taken off from santander 123 and hsbc to a new nationwide flex direct account at 5% my wife and i can have this as our spending account, then send a further 250 a month to a new nationwide 5% reg saver, anything else can go in santander esaver accounts

Halifax i might cancel or keep to make 36 a year just from transfering in and out

Might also join nationwide flex plus for an extra 3% saving and the perks for 13 a month

Only join Nationwide FlexPlus if the perks are worth the money - £13 outstrips the £6 odd you make in interest per month with the full £2,500 in the account.

Nationwide allow you to hold up to 4 current accounts as I recall so there is nothing to stop you holding a FlexDirect and a FlexPlus at the same time if the FlexPlus is worth the fee to you.

If both you and your wife have never had the FlexDirect before, it would make sense for both of you to hold this in your sole name, as you can keep twice as much money at 5%. You should also keep separate Regular Savers to maximise interest (though if you are applying using a joint account to qualify, you would need to use a workaround and each apply from outside of online banking.)