Question about Regular Saver Idea

dude7691

Hi all

So as you all well know interest rates are dismal at the moment. In April, I'm looking to invest around £14k. The best flat rate I could find for a 3 year fixed was 1.4%, with Al Rayan which is just pathetic. Good rate given the base rate, but literally what's the point.

I just did a spreadsheet calculating that I could get around 1.86% return if I opened regular savers with the following providers:

Natwest (I'm switching to them soon): 3.04%, £50 a month

RBS: 3.04%, £50 a month

M&S: 2.75%, £250 a month

First Direct: 2.75%, £300 a month

Swansea BS: 2.02%, £500 a month

Totalling an outgoing of £1,150 a month, meaning roughly all of my 14k would be invested, and I can keep the amount uninvested in a savings account so it's also getting interest, hence the 1.86% return. The reason I'm doing this is that then my money would be freed up in time for the following financial year (Apr 2022) and I might have a better chance at securing a decent fixed rate. I know it seems like I'm jumping through a lot of hoops just for an extra 0.46%, but my money is only locked for a year and some of these accounts allow withdrawals if I ever needed the money.

This would obviously require opening quite a few current accounts. Natwest I'd be switching to this November, so no issues there. However, I'd need to open a new M&S, FD and RBS account over the course of January - April in order to take advantage of this. Would this draw any red flags? I'd then have a total of 6 current accounts.

Thank you

wiseonesomeofthetime

It should not raise any red flags in respect of current accounts as I have held almost double figures in the past, opening and switching like mad 2017 and 2018.

Each will likely require a hard search though, regardless of whether you state you don't want an overdraft, so not a good idea if you're going to be looking for a mortgage deal in the next twelve months.

Then, of course, there is no guarantee of acceptance by each bank.

Other than that, it's achievable.

(Assuming all still available come Jan-Apr 2021)

dude7691

wiseonesomeofthetime said:

It should not raise any red flags in respect of current accounts as I have held almost double figures in the past, opening and switching like mad 2017 and 2018.

Each will likely require a hard search though, regardless of whether you state you don't want an overdraft, so not a good idea if you're going to be looking for a mortgage deal in the next twelve months.

Then, of course, there is no guarantee of acceptance by each bank.

Other than that, it's achievable.

(Assuming all still available come Jan-Apr 2021)

Thank you for that reassurance, that was my only worry. 

Yeah, I don't want an overdraft for any of them but I'm not planning to take out any credit for the next few years so not a problem. I already have a good credit limit on my Aqua credit card so if I ever needed to take on credit I have a means to do so already.

Yep, that's true. At least though I'd know before April as I'd be spreading the applications between Jan and April but you're right, especially if the BOE base rate goes negative these offers might well disappear and I'll have to rethink based on economic conditions then. 

RG2015

Don't forget HSBC, £250 per month at 2.75%

dude7691

RG2015 said:

Don't forget HSBC, £250 per month at 2.75%

Thank you, I would do that but I already have one expiring in July It's a little bit awkward as I'd rather they all just finished within the same month. Still though if the situation is still the same the following April, can always do that albeit the offers will probably have changed drastically by then. 

RG2015

Also, you need to switch an account into M&S to qualify for the regular saver.

Thrugelmir

dude7691 said:

Swansea BS: 2.02%, £500 a month

The £3k you deposit in this account will earn you a far lower rate of interest than the 3 year fix. 

RG2015

Thrugelmir said:

dude7691 said:

Swansea BS: 2.02%, £500 a month

The £3k you deposit in this account will earn you a far lower rate of interest than the 3 year fix. 

Isn't £500 per month to Swansea £6,000?

Also, if this was drip fed from Skipton (1.20%) then the combined yield after 1 year would be about £33 plus £65 which is about 1.63%

JamesRobinson48

I think OP's plan is a good one. Some years ago I started with Regular Savers (RS) just the same way, like many on here I imagine. 

dude7691

RG2015 said:

Thrugelmir said:

dude7691 said:

Swansea BS: 2.02%, £500 a month

The £3k you deposit in this account will earn you a far lower rate of interest than the 3 year fix. 

Isn't £500 per month to Swansea £6,000?

Also, if this was drip fed from Skipton (1.20%) then the combined yield after 1 year would be about £33 plus £65 which is about 1.63%

Yeah it's £500 a month at 2.02% AER. I'm currently using an Al Rayan as my easy access one which is currently sitting at 1.15% but of course it's variable so could go down at any point. 

mrkds

If you don't already have an account with FD  or M&S bank, be aware they are very fussy about who they accept for a current account  I have tried with both and failed, despite having a good credit profile with no obvious red flags on my report. 
I read lots of other people with apparently good credit profiles also being rejected, so don't count on getting access to their regular savers.