TSB classic plus Original

No_Name

I have one of these accounts which I believe was applied for back in 2014 or 2015?


The only requirement for interest is paying in £500 monthly; no DDs.


Just had a look regarding the current version of this account, they are offering £5 cashback on 2 direct debits (which I think is expiring soon). I assume this does not, and never has, apply to my original account?


So the only incentive for keeping hold of this account is the now 5% interest (which in my case is much lower due to tax status!).


I also hold their regular saver.

Inner_Zone

No_Name wrote: »

I have one of these accounts which I believe was applied for back in 2014 or 2015?


The only requirement for interest is paying in £500 monthly; no DDs.

No_Name wrote: »

Just had a look regarding the current version of this account, they are offering £5 cashback on 2 direct debits (which I think is expiring soon). I assume this does not, and never has, apply to my original account?

Correct. I asked if my account (existing Classic) could get these perks added and TSB said no.

No_Name wrote: »

So the only incentive for keeping hold of this account is the now 5% interest (which in my case is much lower due to tax status!).


I also hold their regular saver.

Zanderman

No_Name wrote: »

So the only incentive for keeping hold of this account is the now 5% interest (which in my case is much lower due to tax status!).
I also hold their regular saver.

5%, even on just £1500, is a top rate. THE top rate actually.
You won't find better except on £2500 at Nationwide (but limited to 1 year)
And very easy to keep going with just the £500 deposit needed once a month.

So, not to be sniffed at!

Not sure what you mean by tax status reducing the interest - you still get 5% up front.
You might get taxed on it at some point but 5% taxed is better than less than 5% taxed.

No_Name

40% tax payer


£45 net rather than £75 to someone who doesn't pay tax.


Compared to say Barclays or Natwest's switch incentives, it doesn't compare well (in the short term).



It's unfortunate that the Regular / Monthly Saver needs to be funded from a TSB current account. I'm a few months into this. I think you can close the account at any time, but I wonder if interest is still paid?


The only downside is a new saver can't be opened until the anniversary of opening the first has passed.


Also, future accounts will need two DDs.


Decisions .....

Zanderman

Er, yes, but do you earn so much interest you actually pay tax?
Even higher rate taxpayers have a £500 personal savings allowance before paying any tax on interest.

ValiantSon

No_Name wrote: »

40% tax payer


£45 net rather than £75 to someone who doesn't pay tax.

Um, I think you'll find that plenty of people who are income tax payers get the £75. You would too, if it weren't for the fact that you must be earning over £500 in interest per year. If a basic rate payer was earning over £1,000 in interest then they would be taxed at their marginal rate too.

You could try shifting some of your savings into non-taxable vehicles like ISAs and/or putting the money into investments, which you don't earn interest on (but over the long term offer a much better return) and therefore lower your interest earned to below the £500 allowance. This would give you the full £75 from TSB.

You could also look at increasing the amount you are putting into pensions to take yourself out of higher rate tax, and thus increase your savings allowance to £1,000.

No_Name wrote: »

Compared to say Barclays or Natwest's switch incentives, it doesn't compare well (in the short term).

I've bolded the salient point for you.

No_Name wrote: »

It's unfortunate that the Regular / Monthly Saver needs to be funded from a TSB current account. I'm a few months into this. I think you can close the account at any time, but I wonder if interest is still paid?]/QUOTE]

At 2% why even bother? There are regular savers offering substantially more.

No_Name wrote: »

Also, future accounts will need two DDs.


Decisions .....

What future accounts?

No_Name

Going back to this.


My annual interest exceeds £1000 and I've maxed out ISA subscriptions.


On future accounts, I'm making the assumption that in say 12 - 18 months time, TSB may offer a switch incentive, a decent in-credit rate, but would likely need two or more DDs.


As it stands (for the original plus account - £500 pay in, no DDs) is the 5% interest (on £1500) and 2% regular saver. So for me, after tax, it'll be £3.75 interest/month PLUS £1.50 to date on the RS (as I am 3 months in). Not much to lose on the RS if I closed early.


I can't see any reason not to switch to Barclays (I have a couple of DDs I can activate with Barclays - I don't think this is required as part of the switch?). Even at 'single' rate Blue Rewards, I won't be doing any worse than at TSB?


Any thoughts?

ValiantSon

No_Name wrote: »

Going back to this.


My annual interest exceeds £1000 and I've maxed out ISA subscriptions.

Sounds like you are probably holding a lot of savings as cash. I suggest you look at investments. Inflation will reduce your cash values (and you can't be getting an above inflation rate on all of it). Investments should over the long term produce a better return than cash, and it would also free up some of your available personal savings allowance.

If you've put the maximum £20,000 into a cash ISA already this year, then I suggest starting off by moving that into an S&S ISA.

No_Name wrote: »

On future accounts, I'm making the assumption that in say 12 - 18 months time, TSB may offer a switch incentive, a decent in-credit rate, but would likely need two or more DDs.

Indeed, that is an assumption. At the time of their last switch offer no direct debits were needed (but an additional incentive was offered if you did have two, or set two up).

You probably wouldn't benefit from the incentive anyway because you are already a customer (although some banks do allow this, e.g. NatWest, but not nomally if you have already received a switch incentive from them).

No_Name wrote: »

As it stands (for the original plus account - £500 pay in, no DDs) is the 5% interest (on £1500) and 2% regular saver. So for me, after tax, it'll be £3.75 interest/month PLUS £1.50 to date on the RS (as I am 3 months in). Not much to lose on the RS if I closed early.

The TSB regular saver is absolutely rubbish. You can get a better rate in many other places, including those not requiring a linked current account.

I don't see the advantage of closing your account. Even if you do continue to pay tax on it (and there is every opportunity to change that state of afairs) you are still better off.

No_Name wrote: »

I can't see any reason not to switch to Barclays (I have a couple of DDs I can activate with Barclays - I don't think this is required as part of the switch?). Even at 'single' rate Blue Rewards, I won't be doing any worse than at TSB?

Any thoughts?

If you want to switch to Barclays then do so, but you could have your cake and eat it by sorting out your tax status (pension contributions?) and reducing your very large cash holdings (for a better return), combined with opening an account elsewhere (or a Classic account with TSB, if they'll let you) and then switching that to Barclays.

No_Name

Some interesting points there. I'll have to take a look into a S&S ISA. What's the typical return on this, or what would I've earn't if I invested 5 years ago?


I currently have 20k in a cash ISA - I could move this to a S&S I assume?


I have most regular saver which are linked to a current account. Which ones don't require this?


If I applied for a normal TSB current account, then switched away within two weeks, wouldn't that raise any flags?

ValiantSon

No_Name wrote: »

Some interesting points there. I'll have to take a look into a S&S ISA. What's the typical return on this, or what would I've earn't if I invested 5 years ago?

No such thing as a typical rate of return with investments. I could pick a random fund and tell you how it performed over the last five years, but that would be of no help to you because it doesn't really tell you how it will perform over the next five years. With a well-diversified portfolio (easily achieved through a single multi-asset fund) you could reasonably expect over an economic cycle (c.10 years) to outperform cash investments and make returns that are noticably in excess of inflation over the period.

No_Name wrote: »

I currently have 20k in a cash ISA - I could move this to a S&S I assume?

Yes. Once you had identified what you were going to invest in, you would then identify the platform you were going to do this on. Having done that you would initiate a transfer via them.

No_Name wrote: »

I have most regular saver which are linked to a current account. Which ones don't require this?

Best paying that don't require a linked current account are Leeds Building Society (2.55% on £250 p/m) and Virgin Money (2.25% on £250 p/m).

I assume then that you have Santander (5% on £200 p/m); HSBC (5% on £250 p/m); First Direct (5% on £300 p/m); M&S (5% on £250 p/m); Nationwide (5% on £250 p/m); Lloyds (3% on £400 p/m)?

No_Name wrote: »

If I applied for a normal TSB current account, then switched away within two weeks, wouldn't that raise any flags?

No. Lots of people do it. Just don't keep doing it or you might pee them off and they decide to close all of your accounts, but doing it once will not raise any eyebrows.

mije1983

ValiantSon wrote: »

Best paying that don't require a linked current account are Leeds Building Society (2.55% on £250 p/m) and Virgin Money (2.25% on £250 p/m).

Halifax also have a RS that doesn't require a current account with them. £250 p/m @ 2.5%