FInance MOT

patch9495

Morning Everyone,


I am after some advice to maximise the interest available to me in todays poor interest rate climate given my current finances.


Finances are as below


Ins
£13.5k in Marcus 1.5% easy access paying account
£1750 out of £3000 HSBC regular saver paying 5% (drip feeding out of Marcus account)
£0 out of £3600 First Direct Regular saver paying 5% (plan to drip feed out of Marcus account not yet set up)


Outs
£3500 CC debt 0% until 2021. Paying minimum payments whilst stoozing cash in interest paying accounts. Plan is to balance transfer when the 0% expires ( I have an excellent credit score)
£1250 left on HSBC regular saver (unsure to renew upon maturity alongside FD reg saver, tying up another £3000)
£3600 left on (potential) first Direct saver


Total £8350 (Potential £10100 if I reopen HSBC reg saver)


My concern is that once all of my committed out goings have been accounted for I will only have access to £3400 easy access cash "for a rainy day"


Salary covers mortgage and bills comfortably totalling £650 a month


I wish to maximise the interest available on these accounts however am unsure if by opening FD reg saver as well as renewing HSBC reg saver upon maturity I will be leaving myself too short


Thanks in advance
Alex

eskbanker

patch9495 wrote: »

My concern is that once all of my committed out goings have been accounted for I will only have access to £3400 easy access cash "for a rainy day"

I wouldn't see the money as 'ins' and 'outs' in the way you've presented it, as you're (mostly) just shunting your own money around - I'd see it as assets of £15,250 and (medium term) liabilities of £3,500, so you have a 'net worth' of £11,750 but £15,250 available for the next two years.

You could cash in the HSBC group regular savers at any time if necessary (with loss of at least some interest) and your credit card isn't due for repayment until 2021, so maximising interest earning in the short term seems sensible to me, and indeed you could do more with other current accounts (TSB/Nationwide) and/or regular savers if you choose to.

Do you see your total reserves as being static over the next few years or would you anticipate being able to save more?

patch9495

Hi Eskbanker,


Thanks for the reply,


I anticipate being able to add to my reserves over the next few years however this will be a direct trade off between saving and overpaying on the mortgage, currently 2.14% fixed for the next five years.


The only other large purchase I can envisage over the next few years is a car which for what I am looking at is currently priced at around £6k with my current car having an approximate trade in value of £1k thus making the new car £5k net.


With regards to the car I wouldn't want to pay all at once and would be exploring 0% finance options (either CC or money transfer on CC) allowing me to stooze the cash elsewhere in the meantime


Additionally with the 2 reg savers having the interest paid annually. It is of my understanding that if I was to close these mid term to access the cash, I would for go the entire annum of interest. Please advise if this is incorrect.

Many Thanks
Alex

Mnd

You would get the interest accrued at the date of closing, but if you were that tight to the line, I'm sure you can make partial withdrawals from first direct, without having to close the account. You just can make it back up as I understand

eskbanker

patch9495 wrote: »

Additionally with the 2 reg savers having the interest paid annually. It is of my understanding that if I was to close these mid term to access the cash, I would for go the entire annum of interest. Please advise if this is incorrect.

Both would pay you pro rata interest up to the date of closure but only at a lower rate.

HSBC: You can close your account before the end of the 12 month term however you will receive interest up to the date of closure at our Flexible Saver rate.

FD: If you choose to close your account before the end of the 12 month period you will receive interest up to the date of closure at our Savings Account variable rate. [Note also: "You can not make partial withdrawals."]

Up to you obviously as to how likely it is that you'd need to access all of your cash, but in the context of each of the regular savers paying less than a hundred quid in interest over their term, you can at least quantify the gamble you'd be taking....

colsten

I would echo the suggestion for the 5% TSB and Nationwide current accounts. They take £4,000 between them, you can meet the monthly minimum deposit by reciprocal SOs between the two accounts, and you have instant access to your money, without loss of interest. You might also qualify for the Nationwide Refer A Friend offer.

eskbanker

Perhaps also worth mentioning that a Nationwide FlexDirect, as well as paying 5% on the current account balance (for 12 months), also gives access to their 5% regular saver, which, unlike the HSBC group ones, allows instant access with no loss of interest.

patch9495

Thanks everybody.


I have already taken advantage of the 5% on offer for credit balances up to £2500 through nationwide.


Its actually this account that I have switched to FD to gain access to the £125 switching bonus, without even looking at the fact they had a regular saver also attached.


I guess I can always open another account in the future,


Thanks
Alex