Saving in current accounts, now worse than instant access?

CompulsiveSaver

Just wondering if anyone else has been keeping a few grand in current accounts like Halifax Reward, and Club Lloyds that give £5 a month, previously better than the instant access savings accounts, but the base rate increase and the increase in instant access savings accounts like Shawbrook means they may as well be moved into a savings account as it is less hassle?  I am just thinking of getting rid of them, maybe keep one or two. What are others thoughts?  Nice to have the choice  .

It has also makes premium bonds look even worse... as a basic rate taxpayer (even if they have used their £1000 savings allowance, as the Premium bond wins are tax free) might be better off with the savings account rather than Premium bonds (assuming average luck?)  I work it out that post tax Shawbrook will be 1.4% net (1.75% gross), which is the same as the prize pool for premium bonds, but seem to recall if was circa 1.3% if you exclude the top £1million prize(s)?  Please feel free to correct me if I am mis-remembering .

blue.peter

I'm waiting for things to settle before making any changes. The increase in BofE base rate and any consequential changes will take time to filter through. Banks might yet change what they offer on current accounts, just as they will for savings accounts. Or they might not. If they don't, it's quite possible that it will be better to keep money in a conventional savings account rather than a current account.

Similarly, the notional rate of return on Premium Bonds could be improved.

In other words, it's too soon to say.

k_man

The £500 spend has been a better option (return wise) than the £5000 high balance for the £5/month for a while.

Daliah

There's never been a really good reason to keep £5k in Halifax as there have always been better options for interest (e.g. 5 x Virgin M Plus @ 2% until very recently, then Chase 1.5%, the Virgin M Plus Saver 1.56/1.7%, then Al Rayan 1.8% etc etc ), and you could still get the monthly fiver for spending £500 on the debit card, even if that spend was a deposit into a savings account rather than one of more purchases in shops.

Similar with the Club Lloyds. You could still get your magazine or your cinema tickets without locking up £5k on sub-par interest rates.

I would not hesitate to move my savings to better places - in fact, that's precisely what I have been doing for a number of years, as soon as the opportunity arose.