Advice needed current account or savings?

jbrassy

It's not crazy to keep £5k in a current account if it's paying decent interest. However, you can do better than Club Lloyds. As I understand it, you get paid 0.6% interest on the first £4k, then 1.5% interest on £1000 between £4-5k, then nothing above £5k. Therefore, if you kept £4k in the account, you'd earn £24 interest over a year and if you kept £5k in the account you'd earn £39 interest over a year.

However, you could switch to the Halifax Reward account:
https://www.halifax.co.uk/bankaccounts/current-accounts/reward-current-account.html

If you keep £5k in this account, Halifax will pay you £5 each month which amounts to £60 over a year.

In order to do this, you'd have to keep £5k in the account at all times, then pay in £1500 a month. If you earn more than £1500 a month, you could simply switch and have your salary paid into the account. Alternatively, if you don't want to do a full switch, you could just open the account and set up 2 monthly standing orders. You could set up a standing order on the 1st of the month to pay £1500 into the Halifax account from your main bank account. Then, you could set up a second monthly standing order on the 2nd of the month to send the £1500 back to your main bank account.  

eskbanker

jbrassy said:

As I understand it, you get paid 0.6% interest on the first £5k, then 1.5% interest on £1000 between £5-6k, then nothing above £6k. Therefore, if you kept £5k in the account, you'd earn £30 interest over a year and if you kept £6k in the account you'd earn £45 interest over a year.  

Not quite - as quoted in an earlier post, the thresholds are £4K and £5K, not £5K and £6K.

jbrassy

eskbanker said:

jbrassy said:

As I understand it, you get paid 0.6% interest on the first £5k, then 1.5% interest on £1000 between £5-6k, then nothing above £6k. Therefore, if you kept £5k in the account, you'd earn £30 interest over a year and if you kept £6k in the account you'd earn £45 interest over a year.  

Not quite - as quoted in an earlier post, the thresholds are £4K and £5K, not £5K and £6K.

 I just realised this and edited the post. Should be correct now.

ZeroSum

jbrassy said:

It's not crazy to keep £5k in a current account if it's paying decent interest. However, you can do better than Club Lloyds. As I understand it, you get paid 0.6% interest on the first £4k, then 1.5% interest on £1000 between £4-5k, then nothing above £5k. Therefore, if you kept £4k in the account, you'd earn £24 interest over a year and if you kept £5k in the account you'd earn £39 interest over a year.

However, you could switch to the Halifax Reward account:
https://www.halifax.co.uk/bankaccounts/current-accounts/reward-current-account.html

If you keep £5k in this account, Halifax will pay you £5 each month which amounts to £60 over a year.

In order to do this, you'd have to keep £5k in the account at all times, then pay in £1500 a month. If you earn more than £1500 a month, you could simply switch and have your salary paid into the account. Alternatively, if you don't want to do a full switch, you could just open the account and set up 2 monthly standing orders. You could set up a standing order on the 1st of the month to pay £1500 into the Halifax account from your main bank account. Then, you could set up a second monthly standing order on the 2nd of the month to send the £1500 back to your main bank account.  

Yeah but you can also get £5 from Halifax for keeping £0 in the account so it's pointless doing that instead of Lloyd's. You'd open a Halifax account alongside the Lloyd's one.

colsten

ZeroSum said:

jbrassy said:

It's not crazy to keep £5k in a current account if it's paying decent interest. However, you can do better than Club Lloyds. As I understand it, you get paid 0.6% interest on the first £4k, then 1.5% interest on £1000 between £4-5k, then nothing above £5k. Therefore, if you kept £4k in the account, you'd earn £24 interest over a year and if you kept £5k in the account you'd earn £39 interest over a year.

However, you could switch to the Halifax Reward account:
https://www.halifax.co.uk/bankaccounts/current-accounts/reward-current-account.html

If you keep £5k in this account, Halifax will pay you £5 each month which amounts to £60 over a year.

In order to do this, you'd have to keep £5k in the account at all times, then pay in £1500 a month. If you earn more than £1500 a month, you could simply switch and have your salary paid into the account. Alternatively, if you don't want to do a full switch, you could just open the account and set up 2 monthly standing orders. You could set up a standing order on the 1st of the month to pay £1500 into the Halifax account from your main bank account. Then, you could set up a second monthly standing order on the 2nd of the month to send the £1500 back to your main bank account.  

Yeah but you can also get £5 from Halifax for keeping £0 in the account so it's pointless doing that instead of Lloyd's. You'd open a Halifax account alongside the Lloyd's one.

Sure you can but figuring out how to spend £500 a month on the Halifax debit card might be one step too far for the OP.

ZeroSum

colsten said:

ZeroSum said:

jbrassy said:

It's not crazy to keep £5k in a current account if it's paying decent interest. However, you can do better than Club Lloyds. As I understand it, you get paid 0.6% interest on the first £4k, then 1.5% interest on £1000 between £4-5k, then nothing above £5k. Therefore, if you kept £4k in the account, you'd earn £24 interest over a year and if you kept £5k in the account you'd earn £39 interest over a year.

However, you could switch to the Halifax Reward account:
https://www.halifax.co.uk/bankaccounts/current-accounts/reward-current-account.html

If you keep £5k in this account, Halifax will pay you £5 each month which amounts to £60 over a year.

In order to do this, you'd have to keep £5k in the account at all times, then pay in £1500 a month. If you earn more than £1500 a month, you could simply switch and have your salary paid into the account. Alternatively, if you don't want to do a full switch, you could just open the account and set up 2 monthly standing orders. You could set up a standing order on the 1st of the month to pay £1500 into the Halifax account from your main bank account. Then, you could set up a second monthly standing order on the 2nd of the month to send the £1500 back to your main bank account.  

Yeah but you can also get £5 from Halifax for keeping £0 in the account so it's pointless doing that instead of Lloyd's. You'd open a Halifax account alongside the Lloyd's one.

Sure you can but figuring out how to spend £500 a month on the Halifax debit card might be one step too far for the OP.

Spend or 'spend'?

Its just depositing it into a savings account via debit card

colsten

ZeroSum said:

colsten said:

ZeroSum said:

jbrassy said:

It's not crazy to keep £5k in a current account if it's paying decent interest. However, you can do better than Club Lloyds. As I understand it, you get paid 0.6% interest on the first £4k, then 1.5% interest on £1000 between £4-5k, then nothing above £5k. Therefore, if you kept £4k in the account, you'd earn £24 interest over a year and if you kept £5k in the account you'd earn £39 interest over a year.

However, you could switch to the Halifax Reward account:
https://www.halifax.co.uk/bankaccounts/current-accounts/reward-current-account.html

If you keep £5k in this account, Halifax will pay you £5 each month which amounts to £60 over a year.

In order to do this, you'd have to keep £5k in the account at all times, then pay in £1500 a month. If you earn more than £1500 a month, you could simply switch and have your salary paid into the account. Alternatively, if you don't want to do a full switch, you could just open the account and set up 2 monthly standing orders. You could set up a standing order on the 1st of the month to pay £1500 into the Halifax account from your main bank account. Then, you could set up a second monthly standing order on the 2nd of the month to send the £1500 back to your main bank account.  

Yeah but you can also get £5 from Halifax for keeping £0 in the account so it's pointless doing that instead of Lloyd's. You'd open a Halifax account alongside the Lloyd's one.

Sure you can but figuring out how to spend £500 a month on the Halifax debit card might be one step too far for the OP.

Spend or 'spend'?

Its just depositing it into a savings account via debit card

As we have seen in spades in the Halifax Reward thread, even that is too far for many people.

Zanderman

jbrassy said:

It's not crazy to keep £5k in a current account if it's paying decent interest. However, you can do better than Club Lloyds. As I understand it, you get paid 0.6% interest on the first £4k, then 1.5% interest on £1000 between £4-5k, then nothing above £5k. Therefore, if you kept £4k in the account, you'd earn £24 interest over a year and if you kept £5k in the account you'd earn £39 interest over a year.

However, you could switch to the Halifax Reward account:
https://www.halifax.co.uk/bankaccounts/current-accounts/reward-current-account.html

If you keep £5k in this account, Halifax will pay you £5 each month which amounts to £60 over a year.

In order to do this, you'd have to keep £5k in the account at all times, then pay in £1500 a month. If you earn more than £1500 a month, you could simply switch and have your salary paid into the account. Alternatively, if you don't want to do a full switch, you could just open the account and set up 2 monthly standing orders. You could set up a standing order on the 1st of the month to pay £1500 into the Halifax account from your main bank account. Then, you could set up a second monthly standing order on the 2nd of the month to send the £1500 back to your main bank account.  

As others have said, the Halifax Rewards account will pay out £5 without 5000 in it if you play it another way.

Still need to pay the 1500 in though and I would add, in that respect, that I wouldn't set up an SO in and an SO out on consecutive days, I'd leave a couple of days inbetween to allow for any delays due to bank holidays, weekends, bank errors etc. And probably set it up a few days into the month.

(actually I wouldn't do SOs at all, I'd do it manually, but each to their own) 

Zanderman

brettmanchester said:

I will be getting 1.5% by holding a balance between 4K and 5k, and then as soon as it gets t 5k it looks like i will have to transfer some money out as they wont pay interest over 5k. My concern is am i mad for having thousands in my current account, as i said I’m not used to having this amount some people probably have tens of thousands in there’s I’m just in unknown waters 

Again, as others have said, that's not the case, you're not getting 1.5%. 

You get 1.5% on the bit over 4k and under 5k.  For the bit under 4k you get just 0.6% interest. So, if you kept exactly 5k in there at all times you get an effective interest rate of 0.8%.

That's not bad, but it's only half what you seem to think you're getting.

Still better than most (if not all) easy access savings accounts, so keeping it where it is does make sense.  You are being sensible, not mad, keeping it where it is.

colsten

Zanderman said:

jbrassy said:

It's not crazy to keep £5k in a current account if it's paying decent interest. However, you can do better than Club Lloyds. As I understand it, you get paid 0.6% interest on the first £4k, then 1.5% interest on £1000 between £4-5k, then nothing above £5k. Therefore, if you kept £4k in the account, you'd earn £24 interest over a year and if you kept £5k in the account you'd earn £39 interest over a year.

However, you could switch to the Halifax Reward account:
https://www.halifax.co.uk/bankaccounts/current-accounts/reward-current-account.html

If you keep £5k in this account, Halifax will pay you £5 each month which amounts to £60 over a year.

In order to do this, you'd have to keep £5k in the account at all times, then pay in £1500 a month. If you earn more than £1500 a month, you could simply switch and have your salary paid into the account. Alternatively, if you don't want to do a full switch, you could just open the account and set up 2 monthly standing orders. You could set up a standing order on the 1st of the month to pay £1500 into the Halifax account from your main bank account. Then, you could set up a second monthly standing order on the 2nd of the month to send the £1500 back to your main bank account.  

As others have said, the Halifax Rewards account will pay out £5 without 5000 in it if you play it another way.

Still need to pay the 1500 in though and I would add, in that respect, that I wouldn't set up an SO in and an SO out on consecutive days, I'd leave a couple of days inbetween to allow for any delays due to bank holidays, weekends, bank errors etc. And probably set it up a few days into the month.

(actually I wouldn't do SOs at all, I'd do it manually, but each to their own) 

If you just shuttle between Lloyds and Halifax, or even just between Halifax accounts if you have several, you don't need to worry about any SO delays. Having said this, I also do my Halifax accounts manually, on the same day, so I get by with shuttling just one lot of money, which is then also used for the debit card spend on the same day, once the Halifax shuttling is completed.