Lloyds Club

jrm

Hi. My wife and I have each got the Lloyds Club account. In my opinion for the current account interest starting in July of 1.5% it is not worth holding £5k in each account. So. We each have the maximum account of £400 per month in the regular monthly saving account. My plan reduce our Club accounts to £1.00 in each. Do a same day £1500 transfer each month to avoid the £3.00 month charge. Keeping the monthly regular savings accounts is worth it as it pays 3%. Anyone see any problems with this strategy?

Zanderman

Depends...

Where will you be feeding the Reg savers from? If from a low or no interest paying account the effective interest - 3% per annum pro rata for each month will be more or less the equivalent of the 1.5% you'll be getting on the cash in the Club account.

But if fed from £5k in the Club account you'd be getting 1.5% on the months it's still in the Club account and 3% on the months it's in the Reg Saver. Which adds up to more than if just in the reg saver.

YorkshireBoy

jrm wrote: »

Anyone see any problems with this strategy?

A failure of the automated inbound payment, for whatever reason?

Forgetfulness on your part if making a manual payment?

Online banking issues (such as those at TSB these last two weeks) at the sending bank end, meaning you can't initiate a manual payment?

I think in your shoes I'd fund the monthly savers by SO directly from an external account, rather than SO from Club Lloyds. I'd then do the £1.5K in/out manually (as I do with Halifax Reward, Co-op Rewards, Nationwide FlexAccount, etc, ie those with a token account balance as you're proposing with Club Lloyds).

jrm

Interesting comments. Couple of things. 1. Can the monthly regular savings accounts be funded from a non-Lloyd account ? 2. With Tesco withdrawing the DD facility, I now have no other avenue ?

YorkshireBoy

jrm wrote: »

1. Can the monthly regular savings accounts be funded from a non-Lloyd account ?

At the risk of repeating myself...

YorkshireBoy wrote:

I think in your shoes I'd fund the monthly savers by SO directly from an external account

...or are you asking for a second opinion from someone else?

2. With Tesco withdrawing the DD facility, I now have no other avenue ?

You have many avenues. Depends on how badly you want the 1.5% interest?

jrm

Point taken. Alternatively, as far as lump sums of money are concerned and depending on your circumstances the interest rates on 1 year savings accounts are much in line with B of S and Lloyds current account offerings.

msallen

jrm wrote: »

Point taken. Alternatively, as far as lump sums of money are concerned and depending on your circumstances the interest rates on 1 year savings accounts are much in line with B of S and Lloyds current account offerings.

... except that they tie your money up for a year, whilst in a current account it is by definition available immediately.

where_are_we

If you have a small balance date your monthly standing order for £1500 into your Club Lloyds from your "hub" current account (we use Santander 123 which pays 1.5% up to £20000) 3 days earlier than the return £1500 standing order back to your hub.

jonesMUFCforever

msallen wrote: »

... except that they tie your money up for a year, whilst in a current account it is by definition available immediately.

If you are talking about the Lloyds Club or non club monthly saver then your money is not tied up. You can withdraw at any time - but of course to make the most in interest it is best you leave it there.

AirlieBird

jonesMUFCforever wrote: »

If you are talking about the Lloyds Club or non club monthly saver then your money is not tied up. You can withdraw at any time - but of course to make the most in interest it is best you leave it there.

I believe msallen was referring to jrm's reference to "the interest rates on 1 year savings accounts" and interpreted that reference as being to 1 year fix accounts, as did I. These accounts tend to be fixed with no access. I don't think either of them were referring to Lloyds monthly savers.

Dobbibill

OP - Any reason you've only got the Club monthly savers and not the non-club monthly savers too? They pay 2.5% at the moment so better than the 2% you are getting on the current account before the rates drop. Although unlike the club monthly saver, you can only fund it with £250 max each per month