Current account switching, regular saver accounts and standing orders

TomCrooky

Hi Moneysavingexperts 😁

I'm increasing the amount I'm saving monthly and to get the best interest rates (without investing) I'm planning on saving £1k+ per month by paying the max monthly allowance into regular saver accounts, across 4-5 different banks, getting 4.5% - 7% rates. I've got a couple of questions. 

1. Best approach?

It feels like this is the best return on regular savings out of my salary, despite a reasonable amount of admin effort. Other savings accounts have lower rates, and the fixed term savers that come close either require a lump sum which I don't have, or the interest rate is still lower if I'm making deposits every month, so I might as well use the regular saver. Is my thinking that this is the best way to save with regular monthly deposits correct? 

2. Getting the admin right. 

Two questions here. 
Firstly, I'm trying to work out whether to pay into all the regular savers directly from one account that my salary comes into, or to pay the total savings deposit to each current account in turn, paying the max monthly deposit into the linked regular saver account at each hop. I'm not certain whether I can pay from the current account at one bank directly into a regular saver at another bank. Is this something that is always possible, never possible, or dependent on the specific bank or savings account? 

The second question which relates to the first is whether I need to have current account in order to keep the regular saver. My current thinking is that this is bank specific. E.g. HSBCs regular saver requires you to hold a current account to be eligible. Therefore, as I've seen discussed on this forum, switching away the current account or closing in any other way means the regular saver will be reverted to another type of savings account with a lower interest rate. 
In contrast, Halifax's regular saver appears to have no such conditions, suggesting that if I switched this current account, my regular saver would remain and I can continue paying into it from a current account at another bank. (Screenshot of terms below) 





For context, I have a couple of switcher accounts that I'm using to get switching bonuses, then opening the regular savers with those banks. 
At first I thought I would have to keep all the current accounts and pay money into each current account before transferring to the regular savers with the same bank. However this feels really complicated and risky to set up so many standing orders that are dependent on staying in sequence. I'd also like to use at least one of the current accounts with a regular saver attached to switch for a bonus without opening another current account. 

Any answers or ideas from others experience would be really appreciated.


Thanks. 

eskbanker

Both monthly funding source and linked current account retention terms are bank-specific, so you do need to ensure you familiarise yourself with the key terms of any regular saver that you're considering, but yes, HSBC/FD do seem to be among the more restrictive!

Middle_of_the_Road

Regular savings accounts, as you've rightly said, will be the best approach for saving from your salary. It will take some time to get these set up, but once opened and payments set up, will require little effort for a year or so.

You don't have to do this all at once. Just start the process by choosing the easiest and best rate ones first. If your bank has one that's worth doing, start there. 
Natwest, RBS, Lloyds First Direct all have good rates.

They all operate in the same way, but the requirements regarding funding vary. You will have to work out if you can pay in directly from your main bank, or if a corresponding current account is required.  

Most will mature after 12 months, and will then be transferred to a savings account paying lower rate. A few are longer term, but limit the amount which will pay the headline rate.

YBS and Coventry can be opened independently. Coventry can only be funded from an external account, while with YBS you can set up a regular payment from another suitable YBS savings account.

With regard to your question on Halifax. I found that with Lloyds, if you switch the current account, it will leave you with no online access to the regular saver. Not sure if Halifax is the same, but their systems are near identical, being part of the Lloyds group.

TomCrooky

Thanks for the helpful responses. 

One challenge on working out whether I can pay from another bank, this doesn't typically seem to be in the t&c documents for savings accounts, unless I'm missing what section it would be in. Other than trial and error, I'm not sure how to work this out! 

Ahh...good tip on Halifax and being left with no access. As the terms don't mention requiring an account, I've set up a regular saver (which by default also opens an everyday savings account), processed an instruction for a standing order deposit from my main current account and processed a switch request to a new account. I'm hoping the standing order is successful and the switch only affects the current account. I'm hopeful that my Halifax online banking will stay active given the automatic creation of an everyday saver in addition to the regular saver. 

I'll post again in a week or so once I know the outcome. 

k_man

With Halifax you can open another current account (no hard search) to easily maintain access to the existing savings accounts.

flaneurs_lobster

Might consider Barclay's Rainy Day Saver; it's not a regular saver as such and you do have to faff about with a current account & Blue Rewards but it pays 5% on up to £5K with no funding or withdrawal restrictions.

Doesn't sound like it's of use ATM but their Cash ISA is paying 4%.

Second current account with them good for swapping too. 

macy08

Middle_of_the_Road said:

Regular savings accounts, as you've rightly said, will be the best approach for saving from your salary. It will take some time to get these set up, but once opened and payments set up, will require little effort for a year or so.

You don't have to do this all at once. Just start the process by choosing the easiest and best rate ones first. If your bank has one that's worth doing, start there. 
Natwest, RBS, Lloyds First Direct all have good rates.

They all operate in the same way, but the requirements regarding funding vary. You will have to work out if you can pay in directly from your main bank, or if a corresponding current account is required.  

Most will mature after 12 months, and will then be transferred to a savings account paying lower rate. A few are longer term, but limit the amount which will pay the headline rate.

YBS and Coventry can be opened independently. Coventry can only be funded from an external account, while with YBS you can set up a regular payment from another suitable YBS savings account.

With regard to your question on Halifax. I found that with Lloyds, if you switch the current account, it will leave you with no online access to the regular saver. Not sure if Halifax is the same, but their systems are near identical, being part of the Lloyds group.

You can open the Halifax regular saver without the current account. This is what I did and then a few months later took their switch offer for the current account too.  One is not dependant on the other.

Eco_Miser

Try to open Regular Savers in different months, that way you don't get them all maturing together, and have £12k+ to find a home for - unless you want to put the £12k+ as a lump sum into eg an S&S ISA or a fixed term account.

Usually the Regular Saver players use the matured RSs to feed even more Regular Savers, until a Saver is maturing every month.

Bridlington1

TomCrooky said:

2. Getting the admin right. 

Two questions here. 
Firstly, I'm trying to work out whether to pay into all the regular savers directly from one account that my salary comes into, or to pay the total savings deposit to each current account in turn, paying the max monthly deposit into the linked regular saver account at each hop. I'm not certain whether I can pay from the current account at one bank directly into a regular saver at another bank. Is this something that is always possible, never possible, or dependent on the specific bank or savings account? 

The second question which relates to the first is whether I need to have current account in order to keep the regular saver. My current thinking is that this is bank specific. E.g. HSBCs regular saver requires you to hold a current account to be eligible. Therefore, as I've seen discussed on this forum, switching away the current account or closing in any other way means the regular saver will be reverted to another type of savings account with a lower interest rate. 
In contrast, Halifax's regular saver appears to have no such conditions, suggesting that if I switched this current account, my regular saver would remain and I can continue paying into it from a current account at another bank. 


For context, I have a couple of switcher accounts that I'm using to get switching bonuses, then opening the regular savers with those banks. 
At first I thought I would have to keep all the current accounts and pay money into each current account before transferring to the regular savers with the same bank. However this feels really complicated and risky to set up so many standing orders that are dependent on staying in sequence. I'd also like to use at least one of the current accounts with a regular saver attached to switch for a bonus without opening another current account. 

One thing to note is that Halifax and Bank of Scotland accounts show in the same internet banking and you can fund a Halifax regular saver as a transfer rather than as a new payee from a BOS current/savings account and vice versa in both Halifax and BOS internet banking.

I personally pay into all but one of my 2 dozen or so regular savers by manual bank transfer largely in case I suffer a frozen account, technical difficulties etc that would delay me putting the money in the correct accounts ready for the SOs to go out. Plus I do not like having money sat in current accounts earning no interest waiting for SOs to go out.

As for keeping the current accounts I would keep them as there's no harm in having them open even if you hardly use them unless they have any fees for maintaining the account (I have 25 current accounts now). Plus if you need to use one of the accounts you have a regular saver linked to as a donor account for switching you can always open another account with that bank and fund the monthly saver from that. It also limits my chances of running into any issues with withdrawing the funds when the account matures etc.

I've found admin wise it's not too bad as the regular savers once opened are just a case of bung £x into it and forget about it for a month. I make all but 2 of my deposits on the 1st of the month and have a spreadsheet with a list of the regular savers I have open with min/max monthly deposits and date I need to make my deposit and highlight the rows as I make deposits into them. For the regular savers that I don't have a current account with, I tend to fund most of them from 4 different accounts with a couple of others having one other regular saver linked to it, largely because I do not like to keep all my eggs in one basket accounts wise.

where_are_we

For years I have been paying into all my Regular Savers from one "hub" current account with no problem. Using your current account that your salary comes into is fine. If your salary goes in at end of month this coincides nicely with a large withdrawal on 1st of the next month (except for weekends and bank holidays) to your RS`s. When you set up the RS standing order, usually for 12 months, remember to input a specific date for last payment. Exceptions to calendar month payments ie 1st of month, are First Direct RS and Coventry RS which are anniversary of opening payments which can be any date in the month and possibly HSBC RS which I don`t have. You can pay directly into most RS`s except First Direct and HSBC (I believe) where your SO should be paid to the current account one day before the payment is due to go internally to RS. TSB RS T&C`s also stipulate that you must fund their RS from the TSB current account. 

flaneurs_lobster

I've got a dozen RS saver accounts and started to do as @where_are_we suggests above, feeding monthly income into a hub together with the amounts needed from regular saver accounts to feed the RS directly or their parent current accounts. That plus the amounts needed for reward accounts were paid by chained standing orders.

It all went to rat-poop over xmas/new year when bank holidays started getting in the way.

I now do the whole month-end/beginning payments manually, using a spreadsheet to show each funding requirement and their progress, much as @Bridlington1 describes above.

Takes maybe an hour, but I'd probably have spent that time anyway checking that no SOs had failed for whatever reason.