Is it worth transferring savings account for the sake of £1k?

fimonkey

My hard earned £1k in savings is with halifax cash ISA who have just dropped their rates to an outstanding 0.01%. I could get 1.25% from a non-ISA saving account. Going forward I intend to save £100 per month.
Is it worth my time to switch at this point?? 
Thanks in advance - I expect this will be a quick question to answer
Fi

george4064

Its really up to you, everyone is different in how much effort they are prepared to put in in order to gain a higher rate of interest on their savings.

For you, I would say it is worth it because you'll make a vast improvement by switching your money to a better account than your measly 0.01%. However if your cash was currently earning 1.14% and the best paying account was 1.15% then you might not bother which I can sympathise with. Whilst it might not make a huge difference in £ terms it will certainly help your mind frame, as it should encourage you to make small (or big) changes here and there to save costs/earn more interest, bills, mortgages, investments etc.

bowlhead99

If you have £1000 at the start of the year and £2200 a year later, then on average for the year you have about 1600-1700 in the account. 
An average of £1700 for a year, at 1.25% per year, is about twenty quid. At 0.01% it's less than twenty pence.

So it depends whether the twenty quid is 'worth it' to you. It would probably allow you to buy some little treat that you wouldn't be able to buy otherwise. If left for a second year you would be starting the  second year with £2200 and going up to nearer £3500 in which case getting £20 this year and £20-£30 next year is clearly better than 20-30p each year.  

grumiofoundation

fimonkey said:

Is it worth my time to switch at this point?? 

How much do you value your time?  Time taken to apply for online savings account (maybe 30 mins max) versus £12.40 - chances are a better hourly wage than the vast majority most of jobs. 

Stubod

..yes it is probably worth it if you are going to be increasing your savings as time goes by....every little helps...

MovingForwards

As you say 'hard earned cash' and '£1k' I'm guessing you are not a high rate tax payer or have loads of money in the bank?

If that's the case, any savings account which pays interest isn't going to push you into paying tax on the interest. Therefore an ISA or normal account is neither here nor there.

£1k in 1% account gives 85p a month (based on 31 days a month and no extra money added.)

£1k in 0.01% account gives 1p a month  (based on 31 days a month and no extra money added.)

https://hardwicke.co.uk/simple-interest-calculator/

Whilst it's not a lot, it all adds up, especially as the interest is compounded. 10 months will give you £8.50 or 10p (approx).

What are you saving for? 

My stance is anything 1%+ is worth moving my hard earned cash to 😉

lhsecons

If you put the £1000 in a Virgin Money current account and then opened a Halifax regular savings account for the £100 per month, you could get 2% on all your savings. Not a fortune, but every little helps!

MaxiRobriguez

bowlhead99 said:

If you have £1000 at the start of the year and £2200 a year later, then on average for the year you have about 1600-1700 in the account. 
An average of £1700 for a year, at 1.25% per year, is about twenty quid. At 0.01% it's less than twenty pence.

So it depends whether the twenty quid is 'worth it' to you. It would probably allow you to buy some little treat that you wouldn't be able to buy otherwise. If left for a second year you would be starting the  second year with £2200 and going up to nearer £3500 in which case getting £20 this year and £20-£30 next year is clearly better than 20-30p each year.  

Starting £20 generates good habits.

Switch gas/elec and save £200 over a year, switch broadband save a £100 , switch supermarkets save £400...

Compound over many years....

I say switch it, get into the habit. 

mr_accountant

And another benefit of moving is simplification, easier to have lots of money in a small number of accounts (upto fscs limit) then small amounts in lot of accounts which makes it easier to manage for yourself, and for someone else, eg probate