easy access savings account

JeffMason

Thanks all. Very helpful. I've heard mention of Premium bonds before but never looked into how it worked. 
I'm not a higher rate tax payer and this will be all my savings so it might be worth splitting some into NS&I and some into Premium bonds as suggested. It also seems there's no point putting much of anything into my Marcus account. 
Thanks again!

Archi_Bald

Premium Bonds are just one of the several different accounts NS&I offer.  What Premium Bonds and Income Bond have in common is that withdrawals aren't instant, as they are (sort of) with Marcus. You can check here what the NS&I withdrawal times are. Note there is a peculiar situation with Income Bond deposits (and may be also with PBs) from the 20th of a month to the 5th of the next month, when your deposit might not show as cleared. Even outside these dates, it might take up to 7 days before your deposit clears. You will only ever be able to withdraw cleared funds. In addition, you can only withdraw amounts of £500+ from Income Bonds.

With Marcus, deposits are instant, and withdrawals arrive no later than end of the next working day, but often almost immediately. Similar with RCI.

If you want true instant access, you could use a current account. Quite a few do still pay interest. Virgin, TSB Plus, BoS Vantage, Club Lloyds worth a look.

JeffMason

Archi_Bald said:

Premium Bonds are just one of the several different accounts NS&I offer.  What Premium Bonds and Income Bond have in common is that withdrawals aren't instant, as they are (sort of) with Marcus. You can check here what the NS&I withdrawal times are. Note there is a peculiar situation with Income Bond deposits (and may be also with PBs) from the 20th of a month to the 5th of the next month, when your deposit might not show as cleared. Even outside these dates, it might take up to 7 days before your deposit clears. You will only ever be able to withdraw cleared funds. In addition, you can only withdraw amounts of £500+ from Income Bonds.

With Marcus, deposits are instant, and withdrawals arrive no later than end of the next working day, but often almost immediately. Similar with RCI.

If you want true instant access, you could use a current account. Quite a few do still pay interest. Virgin, TSB Plus, BoS Vantage, Club Lloyds worth a look.

Thanks for this. Very interesting to know. The impression I got from the NS&I income bonds savings account was that it would take a couple of days to withdraw the money. This wouldn't ever be used day to day so I could happily wait up to a week for a withdrawl to happen.

I'm not sure what current accounts offer interest on large amounts, but I'd like to know about them if they exist!

Archi_Bald

1 x Club Lloyds, 3 x BoS Vantage, 1 x Halifax Reward, each maintained at £5K, take £5K each (total £25K) and pay 1.2% at present. 

Virgin 2% takes £1,000.

TSB Plus 1.5% takes £1,500.

Apart from Virgin, they all have conditions to meet, such as minimum monthly deposit. You may or may not want to bother with them for as long as the NS&I Income Bond pays 1.16%. As long as it pays 2%, the Virgin current account would be a nice place to stick the ~£95 monthly interest from £100,000 in the NS&I Income Bond into. 

There are also a range of Regular Savers which pay between 1.2% and 2.75%. These generally run for 12 months (and can then be repeated) and take between £250 and £1,000 a month.

JeffMason

Is there any reason to open an ISA for a portion of this money? I don't have one at the moment as normal bank account interest has always been better.

badger09

JeffMason said:

Is there any reason to open an ISA for a portion of this money? I don't have one at the moment as normal bank account interest has always been better.

If you decide to maximise your interest by using various current accounts & regular savers, then you're likely to exceed your £1k PSA so will be liable to pay some tax on your interest. In which case, it would probably make sense to shelter some of the £100k in an ISA.

Archi_Bald

badger09 said:

JeffMason said:

Is there any reason to open an ISA for a portion of this money? I don't have one at the moment as normal bank account interest has always been better.

If you decide to maximise your interest by using various current accounts & regular savers, then you're likely to exceed your £1k PSA so will be liable to pay some tax on your interest. In which case, it would probably make sense to shelter some of the £100k in an ISA.

Assuming you are a basic rate tax payer, you would need to find an ISA with an interest rate that is not less than 20% lower than that of your instant access / regular saver / current account. That's a tough ask and you are unlikely to find one but come back if I got that wrong.

The exception to that could be a LISA - are you eligible for one?

ffacoffipawb

Archi_Bald said:

badger09 said:

JeffMason said:

Is there any reason to open an ISA for a portion of this money? I don't have one at the moment as normal bank account interest has always been better.

If you decide to maximise your interest by using various current accounts & regular savers, then you're likely to exceed your £1k PSA so will be liable to pay some tax on your interest. In which case, it would probably make sense to shelter some of the £100k in an ISA.

Assuming you are a basic rate tax payer, you would need to find an ISA with an interest rate that is 20% higher than that of your instant access / regular saver / current account. That's a tough ask and you are unlikely to find one but come back if I got that wrong.

The exception to that could be a LISA - are you eligible for one?

Why does the ISA rate need to be higher, let alone 20% higher?

It can be 39% lower and a 40% higher rate taxpayer wins if the £500 PSA has been used up.

Am I missing something?

Archi_Bald

ffacoffipawb said:

Archi_Bald said:

badger09 said:

JeffMason said:

Is there any reason to open an ISA for a portion of this money? I don't have one at the moment as normal bank account interest has always been better.

If you decide to maximise your interest by using various current accounts & regular savers, then you're likely to exceed your £1k PSA so will be liable to pay some tax on your interest. In which case, it would probably make sense to shelter some of the £100k in an ISA.

Assuming you are a basic rate tax payer, you would need to find an ISA with an interest rate that is 20% higher than that of your instant access / regular saver / current account. That's a tough ask and you are unlikely to find one but come back if I got that wrong.

The exception to that could be a LISA - are you eligible for one?

Why does the ISA rate need to be higher, let alone 20% higher?

It can be 39% lower and a 40% higher rate taxpayer wins if the £500 PSA has been used up.

Am I missing something?

No you are not. I was meant to say "only 20% lower". My brain got scrambled in lockdown. Thanks for pointing this out. I am going to update my post now.

JeffMason

I am a basic rate tax payer, and no I’m not eligible for a LISA. 

And wait, 20% higher lower what? I’m confused...