Maximising interest for savings after lifetime isa

NurseMoneySaver1122

REPOSTED HERE AS UNSURE IT WOULD BE SEEN IN OLD THREAD?!?

So we're still saving away (savings breakdown at end of this post below).

We have some savings in my Nationwide Flex Direct Account but the interest rate is due to reduce from 5% to 1% in November. So I'm wondering what we are best to do next.....

Either my partner could now get the Nationwide Account so we continue to get 5% (he currently has TSB account receiving 3% on up to £1500 but wages go into there, and savings alone currently exceed £1500).

Or I read about Barclays Blue Rewards Scheme, which gives £10/mth (after £4/mth fee).

Without knowing how to do the maths, I'm pretty sure the most I ever received in interest from Nationwide was around the £10 mark, so if I'm right, and considering we don't have the maximum amount Nationwide provide interest on so it's a little bit of a waste, then maybe we'd earn more by the Barclays option??

I hope I've made sense. Hoping some of you could critique my saving plan with the extensive knowledge you guys have (I am slowly getting there lol).

Thanks in advance

---

- £5000 in Lifetime ISA (includes £1000/25% bonus)

- £1800 in First Direct Regular Savers (due to mature Mar 2020 with £3600 balance + £97ish interest)

- £1735 in Nationwide Flex Account, but interest rate due to reduce from 5% to 1% from Nov 2019 (this amount estimated to grow to £2800 by end of Mar 2020)

PLAN: Continue saving £300/mth in FD Regular Savers until maturity. Then combine the total balance of £3700ish with £300 from my savings currently in Nationwide, and transfer into Lifetime ISA end of Mar 2020.

Flobberchops

I wouldn't compare the Blue Rewards payment with interest, because there's no obligation to keep the qualifying monthly money in the account. You could quite happily cycle money through the Barclays account, claim the cashback, and keep the majority of your money elsewhere.


To get the full £14 reward (£10 after fee) you would have to open an account if you haven't already, have two active direct debits leaving your account on a monthly basis, and pay £800 into the account each month, AND use the CASS service (a tautology, I know, but it sounds weird by itself) to transfer another current account to Barclays. If you meet, or are willing to meet, all those? Go for it. £120 tax-free net cashback in the first year and £36 a year thereafter isn't bad.


On the subject, Barclays have a Help to Buy ISA paying 2.55% - if you're on the lookout for Regular Saver style products this could suit you. Crucially, unlike most Regular Savers the HTB ISA doesn't mature after a year, allowing your money to compound year on year. Between yourself and your partner you could save £400 a month in a pair of these.

YorkshireBoy

Why not do both Nationwide and Barclays?

NurseMoneySaver1122

How did I not consider both?!? Of course; when theres no stipulation to keep money in Barclays in order to get Cashback!

So maybe I'll Refer a Friend whilst I still have my Nationwide account, so my partner and I get £100 referral bonus each. Then he'd have the Nationwide 5% to store our savings currently in my Nationwide account.

Then I could use the CASS service to switch my Nationwide account to Barclays and get the £10/mth flashback (after jumping through all necessary hoops!).

One question on that though, bearing in ming we are hoping to apply for a mortgage in the nearish future, is it bad on credit to keep switching banks? I ask because the last time I switched (I switched 2 HSBC accounts in a short time to Nationwide and First Direct respectively), my Credit Score through MSE changed (the section about credit applications changed from smiling face to neural face, even though no overdrafts applied for when I switched)...if I'm recalling that correctly?!?

badger09

NurseMoneySaver1122 wrote: »

How did I not consider both?!? Of course; when theres no stipulation to keep money in Barclays in order to get Cashback!

So maybe I'll Refer a Friend whilst I still have my Nationwide account, so my partner and I get £100 referral bonus each. Then he'd have the Nationwide 5% to store our savings currently in my Nationwide account.

Then I could use the CASS service to switch my Nationwide account to Barclays and get the £10/mth flashback (after jumping through all necessary hoops!).

One question on that though, bearing in ming we are hoping to apply for a mortgage in the nearish future, is it bad on credit to keep switching banks? I ask because the last time I switched (I switched 2 HSBC accounts in a short time to Nationwide and First Direct respectively), my Credit Score through MSE changed (the section about credit applications changed from smiling face to neural face, even though no overdrafts applied for when I switched)...if I'm recalling that correctly?!?

Forget 'credit score' which is a made up number. Lenders all use their own methods, but it would be sensible to stop applying for lots of current accounts, say 6 months before you apply for your mortgage.

Even if you decline any overdraft, every current account has the ability to be overdrawn, so best to stop applying before you apply for the mortgage.

Mortgage lenders also like to see stability, so keep at least one long standing current account.