Buffer in Current Account as well as separate Savings Account

StefyS

Good Afternoon everyone,

I was wondering if someone could please give me some advice?

I work in a somewhat commission based job so I get a basic salary and then commission on top of that which means my commission varies from month to month. Some months it's great and other months it's awful, some months its average.

About a year ago, I got a bonus which really helped and ever since then, I tried to not let my current account go below £1800. I also have a separate savings account (currently at £1500) which I put £300 a month into although I must admit, with Christmas and my husbands birthday, what's been going in to my savings, has been coming out.

Recently, our commission structure has changed and I'm not making as much money as I was before. My husband and I went on Holiday to Canada, so the buffer in my account went down to about £1500-£1600 to allow for some spending. So now it's at a lower level of £1550 which means if I have another bad commission month which is this month (so my pay at the end of December) it's going to go down by about another £100 and I'm kind of panicking.

My question is, am I wasting my time keeping such a high buffer in my account? I just like to keep a buffer just in case I have a bad commission month so I have some extra money in there to use if I need to but should I put £1000 in my savings and keep £500 in my account for emergencies? Although I can withdraw the money from my savings account when I want.

I just need some advice as I'm a little stuck.

Thanks in advance

Shakin_Steve

If it's an instant access savings account, which it seems to be, then you'll be getting next to nothing in interest. So it really doesn't make much difference where you keep your spare cash.

eskbanker

StefyS wrote: »

I can withdraw the money from my savings account when I want.

If your savings are easy access then I don't see much point in maintaining a significant buffer in your current account at all - surely the whole point of easy-access savings is to cover emergencies, etc?

I suppose an exception could be if the current account is paying better interest than the savings - a Nationwide FlexDirect pays 5% for a year, a TSB Classic Plus is also 5%, or a Tesco current account pays 3%.

Are you using a decent 5% regular saver account for the monthly savings?