The Top Easy Access Savings Discussion Area

YorkshireBoy

polymaff wrote: »

The handy thing about the 123 accounts is that the DDs don't have to be active, just set up. I just set up and then pointed them at 18866 and 1899 accounts and then never used the service they offer.

You might want to reconsider this approach, since DDs lapse after 13 months of inactivity under the dormancy rules.

polymaff

YorkshireBoy wrote: »

You might want to reconsider this approach, since DD's lapse after 13 months of inactivity under the dormancy rules.

Hmm. Many thanks. I didn't know that. I'll Tesco them asap.

Good old MSE

stphnstevey

Do you guys have 2x Santander 123 accounts in your name then? If so, any tips on how to get this (ie when and how to apply for the second to stay under radar)?

Steve_xx

stphnstevey wrote: »

Do you guys have 2x Santander 123 accounts in your name then? If so, any tips on how to get this (ie when and how to apply for the second to stay under radar)?

I think you just logon to your account and then apply from within.

AndyM86

I'm sure it may have been covered elsewhere on this thread, but having read the article on making use of the high interest current accounts vs ISAs I've been thinking. With savings of below £15k currently split between legacy ISAs and savings accounts, is it best to remove the money from both ISAs and savings and place it in high interest current accounts? Given that the interest post tax on the current accounts is still higher than the interest rate on the ISAs and savings accounts. Then at the end of the year, transfer the money into a NISA thus ensuring that the money is tax exempt for future years.

There seems no value to leaving the money in a tax exempt ISA for the next 11 months if the interest rate is lower than I could get on a current account. It just goes against everything I've ever thought about ISAs, that you should never take the money out of them unless you need to spend it.

2010

stphnstevey wrote: »

Do you guys have 2x Santander 123 accounts in your name then? If so, any tips on how to get this (ie when and how to apply for the second to stay under radar)?

One in sole name and one in joint names.

jimjames

AndyM86 wrote: »

I'm sure it may have been covered elsewhere on this thread, but having read the article on making use of the high interest current accounts vs ISAs I've been thinking. With savings of below £15k currently split between legacy ISAs and savings accounts, is it best to remove the money from both ISAs and savings and place it in high interest current accounts?

That would certainly make sense if you have less than £15k and want to maximise your returns.

AndyM86 wrote: »

Then at the end of the year, transfer the money into a NISA thus ensuring that the money is tax exempt for future years.

This bit doesn't make sense though IF your savings are below £15k and won't go above that in the next 2 years. If that is the case then you might as well keep the current account running until rates are better inside the ISA. There is no point paying into the ISA in March 2015 when rates are still better outside.

AndyM86 wrote: »

There seems no value to leaving the money in a tax exempt ISA for the next 11 months if the interest rate is lower than I could get on a current account. It just goes against everything I've ever thought about ISAs, that you should never take the money out of them unless you need to spend it.

You're right. An ISA is currently pointless for the vast majority of people with average savings. If you have tens of thousands already in an ISA then it is probably still worth keeping them tax free as the non ISA accounts are quite limited in the amounts you can save.

Mr._H_2

AndyM86 wrote: »

is it best to remove the money from both ISAs and savings and place it in high interest current accounts? Given that the interest post tax on the current accounts is still higher than the interest rate on the ISAs and savings accounts. Then at the end of the year, transfer the money into a NISA thus ensuring that the money is tax exempt for future years.

Yes, this sounds like a sensible plan.

You can quickly compare interest rates for "normal" accounts vs ISAs by multiplying the rate of the "normal" account by 0.8 if you are a basic-rate payer, or 0.6 if you are a high-rate payer.

So for basic rate payers:

TSB's 5% "Plus" account will get you 5 * 0.8 = 4% net
Club Lloyds 4% account will get you 4 * 0.8 = 3.2% net
Santander 123 account will get you 3 * 0.8 = 2.4% net

Depending on how much you have so save and whether you are in a couple or just saving by yourself (e.g. as an individual you have access to a max of 2 x TSB Plus accounts for a max of £4k earning 4% net but a couple can get a total of 6 accounts (£12k @ 4%) between them if I understand correctly), you may want to check out the Newcastle Big Home Saver ISA, which pays 3% interest if you save monthly and make no withdrawals.

If you're saving as an individual and have £15k already, you can only save a max of £9k at a post-tax rate that exceeds the Newcastle ISA (2 x TSB Plus accounts gives £4k @ 4% net + 1 x Club Lloyds gives another £5k @ 3.2% net).

AndyM86

Thanks for confirming that I was thinking straight.

jimjames wrote: »

This bit doesn't make sense though IF your savings are below £15k and won't go above that in the next 2 years. If that is the case then you might as well keep the current account running until rates are better inside the ISA. There is no point paying into the ISA in March 2015 when rates are still better outside.

As most of the high interest current accounts are only available for 12 months before the interest rates drop, then transferring into an ISA in March 2015 may give a better return. Obviously, if the interest rate is still better outside of an ISA, then that would be the more sensible option.

AndyM86

Mr._H wrote: »

If you're saving as an individual and have £15k already, you can only save a max of £9k at a post-tax rate that exceeds the Newcastle ISA (2 x TSB Plus accounts gives £4k @ 4% net + 1 x Club Lloyds gives another £5k @ 3.2% net).

There is also the Nationwide Flex Direct account also paying 5% on up to £2500, which I believe you can have two of. So actually, you could have £14k.