How to move cash around to maximise interest?

born_again

YorkshireBoy wrote: »

I'm struggling with your numbers here.

£6,500 x 0.0149 / 12 = £8.07

Subtract the £5 fee and you have £3.07, not £4.99

Unless I've missed something?

If you want some cashback from Santander, open Lite and pay £1/mth, not £5/mth.

Appoligies. My quoted figures are wrong. :eek:

A £6.5K balance would give you £3.07 a month after the fee. As you say
The figures quoted were from the santander site where it gives you a idea of what you would get from that account.
https://www.santander.co.uk/personal/current-accounts/123-current-account

Yes you could get the light acc. But you do not get the 1.5% interest on your balance. Just cash back on certain DD's.

soulsaver

born_again wrote: »

Appoligies. My quoted figures are wrong. :eek:



Yes you could get the light acc. But you do not get the 1.5% interest on your balance. Just cash back on certain DD's.

The point is the Santander 1.5% on your cash isn't going to matter as you'd be earning 5% on it in the Nationwide instead... but as the NW don't do DD cashback, you'd get that in your in the Santander 123 lite.

Zero_Sum

born_again wrote: »

Appoligies. My quoted figures are wrong. :eek:

A £6.5K balance would give you £3.07 a month after the fee. As you say
The figures quoted were from the santander site where it gives you a idea of what you would get from that account.
https://www.santander.co.uk/personal/current-accounts/123-current-account

Yes you could get the light acc. But you do not get the 1.5% interest on your balance. Just cash back on certain DD's.

Full fat 123 isnt worth it. Once you factor in the fee, the return is in effect 1.2% and thats only if you have the full £20k
If you only have £10k then you'd be only getting a 1% return.

You're better off getting the lite version, and a marcus savings account.

Zero_Sum

:cool:

born_again wrote: »

>> We currently have our emerg fund as £6.5k in cash in a lousy-interest current acct @ Nationwide. <<

Switch that to Santander 123 acc pay your DD's etc out of it. While there is a £5 a month charge & requires £500 a month input. Your £6.5k is giving £4.99 a month interest. So any of the qualifying DD's will bring you over £5
Once you get going the 1.5% interest up to £20K makes a nice bonus. Add in reg saver 2.5% for £200 a month. (not the best out there)

£6500 in a 123 account would get you a 0.75% return after fees

YorkshireBoy

Zero_Sum wrote: »

Full fat 123 isnt worth it.

It must only be a matter of time before the rate* is cut too on the back of Tesco, Lloyds, and BoS dropping their rates.


* I suppose they could lower the balance on which it's paid?

YorkshireBoy

Zero_Sum wrote: »

:cool:

£6500 in a 123 account would get you a 0.75% return after fees

I make it 0.57%.

Just in case your figure wasn't a typo?...

(£6,500 x 0.015) - £60 = £37.50 net return

£37.50 on £6,500 = 0.5769%

Zero_Sum

YorkshireBoy wrote: »

I make it 0.57%.

Just in case your figure wasn't a typo?...

(£6,500 x 0.015) - £60 = £37.50 net return

£37.50 on £6,500 = 0.5769%

Im working on the basis that of the £5 fee, £1 is DD cash back (see 123 lite) and the remaining £4 is for the interest. So deducting £48 rather than £60.

soulsaver

Zero_Sum wrote: »

Full fat 123 isnt worth it. Once you factor in the fee, the return is in effect 1.2% and thats only if you have the full £20k
If you only have £10k then you'd be only getting a 1% return.

You're better off getting the lite version, and a marcus savings account.

Or maybe better still Al Rayan 1.6%

daisyfrau

Thanks for this! Hadn’t considered a JISA or a stocks and shares JISA for her. Will take a look!

daisyfrau

YorkshireBoy wrote: »

But, and as colsten said above, why would you not recommend the £6.5K (and another £1K if it can be found) be placed in a trio of Nationwide Flex Direct accounts?

The same £6.5K would then make £325 in the first year, some £27/mth...that's a heck of a lot more return! And the icing on the cake?...open a brace of Santander Everyday accounts, bung a couple of DDs on each, and switch them to Nationwide for £400. In year 1 that's £725 vs your £36.84 plus whatever cashback can be earned.

If you want some cashback from Santander, open Lite and pay £1/mth, not £5/mth.

I am thinking this is definitely the way forward as we will have enough money to start this after payday this month. Thank you for your help!