Dripfeeding regular saver question

info_maniac

Looking for suggestions on how to maximise returns on drip feeding a regular savings account.

I want to open 2x HSBC Regular Saver (self and spouse) - £250 per month (£3000 after 12 months)
And, 2x First Direct Regular Saver (self and spouse) - £300 per month (£3600 after 12 months)

Now, I read MSE’s guide on dripfeeding which says keep you money (the initial £3000 and £3600) in an ‘interest paying current account’ and then ‘dripfeed to regular saver using a standing order’.

Now, this is where my confusion is:
1. Both HSBC and FD don’t seem to have an ‘interest paying current account’
2. While opening regular savers with both HSBC and FD, both will set-up on a standing order on the customer’s current account with them (which does not pay interest).

So, my question is - Is there any other way I can achieve better interest using dripdeefing. The first thing that comes to mind is to open a savings account elsewhere and then transfer the monthly contribution from savings account to regular saver, but this can only be achieved when the transfer goes via the current account.

For 4x regular savers there will be too many transfers across accounts and a chance of missing payment to regular saver, which automatically drops the rate.

Any other ways which I can use?

eskbanker

As you've spotted, drip-feeding into these accounts from interest-earning ones is inherently a two-stage process, via the relevant HSBC/FD current accounts - it's not difficult to do though, and can be fully automated via standing orders....

info_maniac

eskbanker wrote: »

As you've spotted, drip-feeding into these accounts from interest-earning ones is inherently a two-stage process, via the relevant HSBC/FD current accounts - it's not difficult to do though, and can be fully automated via standing orders....

Thanks, is it possible to set-up standing orders on a savings account? I was under an impression that you need to manually log-in transfer each month to your 'nominated' current account.

eskbanker

info_maniac wrote: »

Thanks, is it possible to set-up standing orders on a savings account? I was under an impression that you need to manually log-in transfer each month to your 'nominated' current account.

I don't think many savings accounts allow standing orders, so if you're wanting to handle this via standing orders then this goes back to using interest-paying current accounts as the source....

info_maniac

Yes, that was my understanding as well, hence the original question.

So, "complete automation" isn't possible as per your comment earlier?

xylophone

You and your spouse could each open a TSB Classic Plus current account and a joint.

This would would enable a total of £4500 to earn 5%.

Set up appropriately timed SOs for cash to be in the HSBC and FD accounts in time to meet the SOs for the RS?

eskbanker

info_maniac wrote: »

Yes, that was my understanding as well, hence the original question.

So, "complete automation" isn't possible as per your comment earlier?

Perhaps we're at cross purposes - you can fully automate this if you open an interest-paying current account with, say, Nationwide, and set up standing orders from there to FD/HSBC current accounts, scheduled to align with the subsequent standing orders from these to their respective regular savers.

RG2015

eskbanker wrote: »

Perhaps we're at cross purposes - you can fully automate this if you open an interest-paying current account with, say, Nationwide, and set up standing orders from there to FD/HSBC current accounts, scheduled to align with the subsequent standing orders from these to their respective regular savers.

I think the OP has a lump sum of £6,600 being the maximum after 12 months with HSBC and FD.

This is above the £2,500 maximum for a Nationwide current account earning interest (either 5% in year 1 or 1% thereafter). Even adding in TSB (5%) only raises this to £4,000.

I guess that Tesco Bank at 1% for £3,000 would work in conjunction with the others to give full automation although this requires direct debits to be set up which would muddy the waters somewhat.

eskbanker

RG2015 wrote: »

I think the OP has a lump sum of £6,600 being the maximum after 12 months with HSBC and FD.

This is above the £2,500 maximum for a Nationwide current account earning interest (either 5% in year 1 or 1% thereafter). Even adding in TSB (5%) only raises this to £4,000.

I guess that Tesco Bank at 1% for £3,000 would work in conjunction with the others to give full automation although this requires direct debits to be set up which would muddy the waters somewhat.

Yes, fair point about the balance caps, although as they're a couple those figures can be (at least) doubled. There are also Lloyds and BoS current accounts paying 1.5% (with strings).

However, I was trying to convey the principle rather than the detail - in order to maximise return (as desired by OP and suggested by MSE), there's inevitably some effort involved, but simpler options are always available for correspondingly lesser returns....

RG2015

eskbanker wrote: »

Yes, fair point about the balance caps, although as they're a couple those figures can be (at least) doubled. There are also Lloyds and BoS current accounts paying 1.5% (with strings).

However, I was trying to convey the principle rather than the detail - in order to maximise return (as desired by OP and suggested by MSE), there's inevitably some effort involved, but simpler options are always available for correspondingly lesser returns....

Yes, I agree there is always a way but it does need some work and the OP appears to be looking for a turnkey solution.

And I think the OP and their spouse are both looking to open the regular savers so I had already factored in the doubling up. I hadn't though looked at joint accounts as well. Mind you we should leave something for the OP to do themselves .