Choosing a savings account

w00519773

I have about 55K in savings and about 18K in a stocks and shares ISA.  My mortgage is now about 40K and the interest rate is about 1.9%.

A lot of the 55K earns almost no interest.  I want to pay off my mortgage when my fixed rate term ends in May next year.  I am trying to decide what to do with the 55K in savings.  I believe I have three options after looking here: Savings accounts: 3.1% easy access or up to 4.4% fixed (moneysavingexpert.com)

1) I already have a Nationwide account so open an easy access account earning 2.25% interest per annum.  I will leave £8K in my current account (three months salary) so I can use it as and when (Nationwide only allows two withdrawals).  My money would grow by approximately £1,175 i.e. 0.025x47000.

2) Open a Tandem bank account and earn 3.05% on the 55,000 and drip feed cash into my current account as and when I need it.  My money would grow by approximately £1,925 i.e. 0.035x55000.

3) Lock the money away for one year with SmartSave and earn 4.17% interest.  will leave £8K in my current account (three months salary) so I can use it as and when.  My money would grow by approximately £2,209.

I realise that these are not exact calculations because: 1) Interest is cumulative 2) I will be drip feeding money out with option 2.

I won't need the money for twelve months as it stands.  I would be interested to hear from others who were in a similar situation.

grumbler

w00519773 said:

I have about 55K in savings and about 18K in a stocks and shares ISA.  My mortgage is now about 40K and the interest rate is about 1.9%.

A lot of the 55K earns almost no interest.  I want to pay off my mortgage when my fixed rate term ends in May next year.  I am trying to decide what to do with the 55K in savings.  I believe I have three options after looking here: Savings accounts: 3.1% easy access or up to 4.4% fixed (moneysavingexpert.com)

1) I already have a Nationwide account so open an easy access account earning .0.25% interest per annum.  I will leave £8K in my current account (three months salary) so I can use it as and when (Nationwide only allows two withdrawals).  My money would grow by approximately £1,175 i.e. 0.025x47000.

2) Open a Tandem bank account and earn 3.05% on the 55,000 and drip feed cash into my current account as and when I need it.  My money would grow by approximately £1,925 i.e. 0.035x55000.

I think you mean 2.25% at Nationwide. But why do you want this money in Nationwide, not, say, in Tandem where withdrawals are unlimited and pretty much instant?

3) Lock the money away for one year with SmartSave and earn 4.17% interest.  will leave £8K in my current account (three months salary) so I can use it as and when.  My money would grow by approximately £2,209.

This is better.

I realise that these are not exact calculations because: 1) Interest is cumulative 2) I will be drip feeding money out with option 2.

I think it 4.17% figure implies compounding. You still can do drip feeding by combining (2) and (3), but it's better to use regular savings accounts for this where  you can get 4.5-7.0%. With jumping through some hoops you can get 5% on up to £5K with instant access at Barclays.

Bridlington1

Do not leave £8k in a current account. Putting the money in an easy access account is just as accessible and it will actually earn interest. I would stick the £8k emergency fund in tandem for now and then what you do with the rest is up to you. The 1Y fix idea looks promising, though depending on your tax status you may want to think about putting some of it in a cash ISA though.

Regular savers are a good option and as many are easy access you could use them for the emergency fund.

This one's thinking slightly out the box but Nationwide have launched a 5% cashback on supermarket spending offer (£10 max per month), which runs for the next 3 months. One option is to buy £200 worth of supermarket gift cards each month using your Nationwide debit card to bag the maximum cashback then use them for normal shopping. Using this money you effectively earn 5% on the money you are going to be spending anyway.

By my calculations once you've paid off the mortgage you will have around £15k left in cash savings (assuming you don't add to your savings in the mean time) so it may be worth looking at topping up pensions.

fabsaver

w00519773 said:

1) I already have a Nationwide account so open an easy access account earning .0.25% interest per annum.  I will leave £8K in my current account (three months salary) so I can use it as and when (Nationwide only allows two withdrawals).  My money would grow by approximately £1,175 i.e. 0.025x47000.

2) Open a Tandem bank account and earn 3.05% on the 55,000 and drip feed cash into my current account as and when I need it.  My money would grow by approximately £1,925 i.e. 0.035x55000.

3) Lock the money away for one year with SmartSave and earn 4.17% interest.  will leave £8K in my current account (three months salary) so I can use it as and when.  My money would grow by approximately £2,209.

The Nationwide Instant Saver account, currently paying 2.25%, is instant access with unlimited withdrawals. I think you may be getting the account mixed up with their 2.5% Triple Access Online Saver.

There is no need to leave £8k in a current account when there are instant access accounts paying 3% or more.

It's not clear if the money you have in an ISA has been put in this tax year. If you still have this years allowance available you could consider the One year Virgin Money Cash ISA paying 4.25%. 
https://uk.virginmoney.com/savings/products/1_year_fixed_rate_cash_isa_exclusive_issue_4/
That's higher than any of the non ISA one year fixes currently available. Plus the advantage of a cash ISA over a normal fixed term account is that access is permitted if needed, subject to an interest penalty.

Albermarle

The Nationwide Instant Saver account, currently paying 2.25%, is instant access with unlimited withdrawals. I think you may be getting the account mixed up with their 2.5% Triple Access Online Saver.

Just to complete the picture, the Nationwide Loyalty saver ( easy access) is paying 2.5% with no withdrawal restrictions.

However AFAIK not possible to open a new account, only keep existing ones.

w00519773

fabsaver said:

w00519773 said:

1) I already have a Nationwide account so open an easy access account earning .0.25% interest per annum.  I will leave £8K in my current account (three months salary) so I can use it as and when (Nationwide only allows two withdrawals).  My money would grow by approximately £1,175 i.e. 0.025x47000.

2) Open a Tandem bank account and earn 3.05% on the 55,000 and drip feed cash into my current account as and when I need it.  My money would grow by approximately £1,925 i.e. 0.035x55000.

3) Lock the money away for one year with SmartSave and earn 4.17% interest.  will leave £8K in my current account (three months salary) so I can use it as and when.  My money would grow by approximately £2,209.

The Nationwide Instant Saver account, currently paying 2.25%, is instant access with unlimited withdrawals. I think you may be getting the account mixed up with their 2.5% Triple Access Online Saver.

There is no need to leave £8k in a current account when there are instant access accounts paying 3% or more.

It's not clear if the money you have in an ISA has been put in this tax year. If you still have this years allowance available you could consider the One year Virgin Money Cash ISA paying 4.25%. 
https://uk.virginmoney.com/savings/products/1_year_fixed_rate_cash_isa_exclusive_issue_4/
That's higher than any of the non ISA one year fixes currently available. Plus the advantage of a cash ISA over a normal fixed term account is that access is permitted if needed, subject to an interest penalty.

I cannot see that Virgin rate here: Savings accounts: 3.1% easy access or up to 4.4% fixed (moneysavingexpert.com).  Was this account introduced very recently?

w00519773

w00519773 said:

fabsaver said:

w00519773 said:

1) I already have a Nationwide account so open an easy access account earning .0.25% interest per annum.  I will leave £8K in my current account (three months salary) so I can use it as and when (Nationwide only allows two withdrawals).  My money would grow by approximately £1,175 i.e. 0.025x47000.

2) Open a Tandem bank account and earn 3.05% on the 55,000 and drip feed cash into my current account as and when I need it.  My money would grow by approximately £1,925 i.e. 0.035x55000.

3) Lock the money away for one year with SmartSave and earn 4.17% interest.  will leave £8K in my current account (three months salary) so I can use it as and when.  My money would grow by approximately £2,209.

The Nationwide Instant Saver account, currently paying 2.25%, is instant access with unlimited withdrawals. I think you may be getting the account mixed up with their 2.5% Triple Access Online Saver.

There is no need to leave £8k in a current account when there are instant access accounts paying 3% or more.

It's not clear if the money you have in an ISA has been put in this tax year. If you still have this years allowance available you could consider the One year Virgin Money Cash ISA paying 4.25%. 
https://uk.virginmoney.com/savings/products/1_year_fixed_rate_cash_isa_exclusive_issue_4/
That's higher than any of the non ISA one year fixes currently available. Plus the advantage of a cash ISA over a normal fixed term account is that access is permitted if needed, subject to an interest penalty.

I cannot see that Virgin rate here: Savings accounts: 3.1% easy access or up to 4.4% fixed (moneysavingexpert.com).  Was this account introduced very recently?

I see that account here: Savings accounts: 3.1% easy access or up to 4.4% fixed (moneysavingexpert.com).  I don't see it here though: Savings accounts: 3.1% easy access or up to 4.4% fixed (moneysavingexpert.com) ?

Band7

w00519773 said:

w00519773 said:

fabsaver said:

w00519773 said:

1) I already have a Nationwide account so open an easy access account earning .0.25% interest per annum.  I will leave £8K in my current account (three months salary) so I can use it as and when (Nationwide only allows two withdrawals).  My money would grow by approximately £1,175 i.e. 0.025x47000.

2) Open a Tandem bank account and earn 3.05% on the 55,000 and drip feed cash into my current account as and when I need it.  My money would grow by approximately £1,925 i.e. 0.035x55000.

3) Lock the money away for one year with SmartSave and earn 4.17% interest.  will leave £8K in my current account (three months salary) so I can use it as and when.  My money would grow by approximately £2,209.

The Nationwide Instant Saver account, currently paying 2.25%, is instant access with unlimited withdrawals. I think you may be getting the account mixed up with their 2.5% Triple Access Online Saver.

There is no need to leave £8k in a current account when there are instant access accounts paying 3% or more.

It's not clear if the money you have in an ISA has been put in this tax year. If you still have this years allowance available you could consider the One year Virgin Money Cash ISA paying 4.25%. 
https://uk.virginmoney.com/savings/products/1_year_fixed_rate_cash_isa_exclusive_issue_4/
That's higher than any of the non ISA one year fixes currently available. Plus the advantage of a cash ISA over a normal fixed term account is that access is permitted if needed, subject to an interest penalty.

I cannot see that Virgin rate here: Savings accounts: 3.1% easy access or up to 4.4% fixed (moneysavingexpert.com).  Was this account introduced very recently?

I see that account here: Savings accounts: 3.1% easy access or up to 4.4% fixed (moneysavingexpert.com).  I don't see it here though: Savings accounts: 3.1% easy access or up to 4.4% fixed (moneysavingexpert.com) ?

The Virgin account is an ISA, listed in https://www.moneysavingexpert.com/savings/best-cash-isa/. The other list is for non-ISA accounts/

NB. Your two links are the same...

fabsaver

w00519773 said:

fabsaver said:

w00519773 said:

1) I already have a Nationwide account so open an easy access account earning .0.25% interest per annum.  I will leave £8K in my current account (three months salary) so I can use it as and when (Nationwide only allows two withdrawals).  My money would grow by approximately £1,175 i.e. 0.025x47000.

2) Open a Tandem bank account and earn 3.05% on the 55,000 and drip feed cash into my current account as and when I need it.  My money would grow by approximately £1,925 i.e. 0.035x55000.

3) Lock the money away for one year with SmartSave and earn 4.17% interest.  will leave £8K in my current account (three months salary) so I can use it as and when.  My money would grow by approximately £2,209.

The Nationwide Instant Saver account, currently paying 2.25%, is instant access with unlimited withdrawals. I think you may be getting the account mixed up with their 2.5% Triple Access Online Saver.

There is no need to leave £8k in a current account when there are instant access accounts paying 3% or more.

It's not clear if the money you have in an ISA has been put in this tax year. If you still have this years allowance available you could consider the One year Virgin Money Cash ISA paying 4.25%. 
https://uk.virginmoney.com/savings/products/1_year_fixed_rate_cash_isa_exclusive_issue_4/
That's higher than any of the non ISA one year fixes currently available. Plus the advantage of a cash ISA over a normal fixed term account is that access is permitted if needed, subject to an interest penalty.

I cannot see that Virgin rate here: Savings accounts: 3.1% easy access or up to 4.4% fixed (moneysavingexpert.com).  Was this account introduced very recently?

There's a separate page for Cash ISAs and it's listed there https://www.moneysavingexpert.com/savings/best-cash-isa/

35har1old

w00519773 said:

fabsaver said:

w00519773 said:

1) I already have a Nationwide account so open an easy access account earning .0.25% interest per annum.  I will leave £8K in my current account (three months salary) so I can use it as and when (Nationwide only allows two withdrawals).  My money would grow by approximately £1,175 i.e. 0.025x47000.

2) Open a Tandem bank account and earn 3.05% on the 55,000 and drip feed cash into my current account as and when I need it.  My money would grow by approximately £1,925 i.e. 0.035x55000.

3) Lock the money away for one year with SmartSave and earn 4.17% interest.  will leave £8K in my current account (three months salary) so I can use it as and when.  My money would grow by approximately £2,209.

The Nationwide Instant Saver account, currently paying 2.25%, is instant access with unlimited withdrawals. I think you may be getting the account mixed up with their 2.5% Triple Access Online Saver.

There is no need to leave £8k in a current account when there are instant access accounts paying 3% or more.

It's not clear if the money you have in an ISA has been put in this tax year. If you still have this years allowance available you could consider the One year Virgin Money Cash ISA paying 4.25%. 
https://uk.virginmoney.com/savings/products/1_year_fixed_rate_cash_isa_exclusive_issue_4/
That's higher than any of the non ISA one year fixes currently available. Plus the advantage of a cash ISA over a normal fixed term account is that access is permitted if needed, subject to an interest penalty.

I cannot see that Virgin rate here: Savings accounts: 3.1% easy access or up to 4.4% fixed (moneysavingexpert.com).  Was this account introduced very recently?

  

You need to hold a current account with Virgin to obtain the 4.25% if you don't their one year ISA pays 4%

1 Year Fixed Rate Cash E-ISA Virgin

Fixed rate of:

4.00%

AER1 Tax-free3

Pay money inWithin 30 days from account opening

Take money outSubject to a charge

w00519773

35har1old said:

w00519773 said:

fabsaver said:

w00519773 said:

1) I already have a Nationwide account so open an easy access account earning .0.25% interest per annum.  I will leave £8K in my current account (three months salary) so I can use it as and when (Nationwide only allows two withdrawals).  My money would grow by approximately £1,175 i.e. 0.025x47000.

2) Open a Tandem bank account and earn 3.05% on the 55,000 and drip feed cash into my current account as and when I need it.  My money would grow by approximately £1,925 i.e. 0.035x55000.

3) Lock the money away for one year with SmartSave and earn 4.17% interest.  will leave £8K in my current account (three months salary) so I can use it as and when.  My money would grow by approximately £2,209.

The Nationwide Instant Saver account, currently paying 2.25%, is instant access with unlimited withdrawals. I think you may be getting the account mixed up with their 2.5% Triple Access Online Saver.

There is no need to leave £8k in a current account when there are instant access accounts paying 3% or more.

It's not clear if the money you have in an ISA has been put in this tax year. If you still have this years allowance available you could consider the One year Virgin Money Cash ISA paying 4.25%. 
https://uk.virginmoney.com/savings/products/1_year_fixed_rate_cash_isa_exclusive_issue_4/
That's higher than any of the non ISA one year fixes currently available. Plus the advantage of a cash ISA over a normal fixed term account is that access is permitted if needed, subject to an interest penalty.

I cannot see that Virgin rate here: Savings accounts: 3.1% easy access or up to 4.4% fixed (moneysavingexpert.com).  Was this account introduced very recently?

  

You need to hold a current account with Virgin to obtain the 4.25% if you don't their one year ISA pays 4%

1 Year Fixed Rate Cash E-ISA Virgin

Fixed rate of:

4.00%

AER1 Tax-free3

Pay money inWithin 30 days from account opening

Take money outSubject to a charge

Are the current accounts free? I will check the terms later, nut thought I would ask in the meantime.