18+ how can I get 3% AER

jamesess

I have just turned 18, my Santander mini account gives me 3% AER up to £2000, will be converted to a Santander student account as I am off to uni, where it will still pay me 3% AER up to £2000. How can I get another account that will give me the same 3% for the money I have left over from my £2000? No other student account gives any reasonable interest, current accounts seem to be about 1.5% along with ISAs, Premium Bonds (if you look at average winnings). Savings accounts are no better unless they are a 5 year deal which I don't really want to be tied to. So my question is where can I get 3% AER on ~£1000-£5000?
Many thanks
James

Nebulous2

I'm not sure what you're asking. How much money will you need a home for? I think you need to alter your figures in your post to be clearer about how much you need. Why do you need 3%?

Nationwide will give 5% on 2500 for a year. If you can switch an account and get someone to refer you you'll get £100 each. Tsb pays 3% on £1500. Again a referrer can get £75. That's just a start. Then some accounts have regular savers at 5%

Read through the banking forum, including the information in the links at the top on best bank accounts for more information and ideas.

jamesess

3% was just what I already had so just thought there must be a way save my extra ~£1000-£5000 at the same interest rate. Thanks for the reply so I could either get the high rates and switch yearly or regular savers at 5% would you have a link to that as that sounds more what I'm after. I have read all the MSE bank account pages but the bst seem to offer like 5% and then drop to 1% after a year.
James

MallyGirl

Interest rates just are better for kids - welcome to the world of adulting where we have to make much more effort to get anything more than 1.5%.
It depends how much effort you want to expend to get a couple more percent on a few thousand. Do the maths to see what the difference in earned interest is and see if it is worth it to you.
I run 5 RS accounts to get 5% but that requires SOs to move money around plus a couple were tied to switching accounts. You might decide to use that time for studies instead.

Nebulous2

The best accounts are here at this link. Nationwide only gives you 5% for a year, but opening a spare account, making sure you meet the criteria for a switch and getting the £100 for someone referring it could make you some additional money. My 5% on £1500 in TSB gives me just over £6 a month. It would take 16 months to make that £100.

Regular savers are good if you can tie up the money for a year. With a few bank accounts you can have several of them going at the same time.

If you want to get the best returns you can then you'll need to work at it. Keep an eye on the forums and switch as required.

System

This is credit card how?

Mnd

The tsb one isn't a 1 year deal.it's ongoing, but no guarantee that it won't change, up to recently it was 5%

Terry_Towelling

beany_bot wrote: »

This is credit card how?

No, I think this is budgeting and bank accounts how

Flobberchops

Welcome to adulthood; the possibilities are endless but the interest rates suck.


If you're looking for ongoing or shorter term benefits, peruse the aforementioned sign-up bonuses and interest paying accounts. Don't let the fact that they're just one-off or only last a year dissuade you - that £100 sign up bribe already blows the £60 interest you'd get (at 3% on £2k) out of the water. Also weigh up the value of any cashback or rewards cash you can get your hands on. For example, Barclays pays me £48 a year to have £800 go in and out of my account each month. In terms of an equivalent annual interest rate, that's 6%.

In the longer term, you can get some more bang for your buck using a Lifetime ISA (25% government top-up!) *only* if you're planning on using that money for a house purchase or retirement. If you're still unsure, get in there quickly and open a Help to Buy ISA before they're taken off sale later this year. The highest paying one is Barclays at 2.58% and you won't pay any penalty for withdrawing the cash for non-house use. You can also use your ISA allowance to buy stocks and shares which in the long run should easily beat 3% (diversify and do your homework).

As a youngster though, perhaps best to worry more about your earnings and saving rate rather than the interest rate you're getting. Working an extra shift a month would get you about, what, £50 a shift, so £600 total? That's ten times the amount you're sweating trying to get in interest. Or up your saving rate by lowering your expenditure. Each time you buy a prepacked sandwich or pay a bus fare for a journey you could have walked, ask yourself how many days interest that represents. A penny saved really is a penny earned.

jamesess

thank you,
I think you are right about how relative 3% is in terms of general savings, I think a help to buy isa sounds like a good idea and some further research needed, appreciate that its not as easy as getting given it on a plate, not sure how Santander can along with rail card and 0% overdraft but ill take it. and I think you are right about the switching bonus aforementioned as it really is better then the interest. Thanks for you help
James

PRAISETHESUN

Mnd wrote: »

The tsb one isn't a 1 year deal.it's ongoing, but no guarantee that it won't change, up to recently it was 5%

TSB is dropping its rate to 3% from 02Jul.
https://www.moneysavingexpert.com/news/2019/04/tsb-cuts-interest-rate-on-its-current-account-to-3-/

In a nutshell, as has been discussed there is no easy way to get a decent return on your money unless you want to put in a bit of effort. A few banks offer 5% regular savers (HSBC, M&S Bank and First Direct), but there are limits to how much money you can put into them, and also require the bank's associated current account - these banks are notoriously picky with who they accept as customers so there is no guarantee you'll be accepted, particularly without a solid income or good credit history