Keep switching around as finding better interest rates?

martyp

Hi all,

No doubt there is a fair amount of excitement for those with money to take advantage of the savings interest rates. I have mine in accounts paying 6.17%, 5.25%, 4.25% and 2.5% via my banks but of course the issue is keep finding the better deals as they come out.
What I fear is switching around and closing accounts too often and it impacting credit ratings etc? I'm aiming for accounts linked to my current accounts so have been fortunate I bank with places offering quite decent savings rates and generally aiming for high interest rates on non-linked accounts with other institutions to save opening or switching to new current accounts just for that benefit of the linked savings account.
All mine are either limited or easy access as well but may chance a 1 year lock in possibly. Of course many are variable still.
I just don't know if it's good to keep jumping on new rates as they come up?

retiringtoosoon

Yes it is.

boingy

Yep, it's good but only if you can be bothered and have the time, or if you enjoy it!
But it's also worth running a calculator over the gains. Unless you have a big pot of money it might not be worth switching for a couple of tenths of a percent.

Also, be careful not to get locked into fixed rates for too long if you think that interest rates are going to rise a little more.

And, yes, savings accounts linked to current accounts can be a bit of a pain, especially the regular savings ones that will only accept deposits from that linked account. I currently have six regular savings accounts on the go but it takes 11 standing orders to feed them because I have to relay the money via the otherwise unused current accounts.

I've not noticed any negative impact on my credit rating but I've only used the free tools for the rating. I'm never quite sure if they tell the whole story.

wiseonesomeofthetime

Savings accounts do not report to CRAs as they are savings, not credit, so do not worry about that.

martyp

Thanks boingy, much appreciated. I like the rates I'm getting at the moment. The best ones do seem to be the ones with a monthly limit. I was kicking myself with one when I withdrew a fair amount then they hiked up the interest rate unexpectedly so have been filling it up again.
I've hesitated to on long term fixes in case I may need the money for anything.

martyp

wiseonesomeofthetime said:

Savings accounts do not report to CRAs as they are savings, not credit, so do not worry about that.

Perfect, thanks for confirming as wasn't sure if they did get picked up somewhere.

auser99

martyp said:

Thanks boingy, much appreciated. I like the rates I'm getting at the moment. The best ones do seem to be the ones with a monthly limit. I was kicking myself with one when I withdrew a fair amount then they hiked up the interest rate unexpectedly so have been filling it up again.
I've hesitated to on long term fixes in case I may need the money for anything.

The best rates are technically those with the small monthly limits and useful if you only have a small amount available to put in each week / don't want to tie up for a year or more.

But generally, fixed bonds will produce higher interest over a year as a whole, which some may miss as they'll just see the apparatent higher interest rate offered on the ,monthly limit accounts.

wmb194

auser99 said:

martyp said:

Thanks boingy, much appreciated. I like the rates I'm getting at the moment. The best ones do seem to be the ones with a monthly limit. I was kicking myself with one when I withdrew a fair amount then they hiked up the interest rate unexpectedly so have been filling it up again.
I've hesitated to on long term fixes in case I may need the money for anything.

But generally, fixed bonds will produce higher interest over a year as a whole, which some may miss as they'll just see the apparatent (sic) higher interest rate offered on the ,monthly limit accounts.

No, you'll always earn more with the higher rate.

jimjames

If you're switching out of fixed rates and paying an interest penalty to do so then you need to make sure that it's actually worthwhile. The rates you're mentioning are not instant access unless you're quoting regular saver accounts.

auser99

wmb194 said:

auser99 said:

martyp said:

Thanks boingy, much appreciated. I like the rates I'm getting at the moment. The best ones do seem to be the ones with a monthly limit. I was kicking myself with one when I withdrew a fair amount then they hiked up the interest rate unexpectedly so have been filling it up again.
I've hesitated to on long term fixes in case I may need the money for anything.

But generally, fixed bonds will produce higher interest over a year as a whole, which some may miss as they'll just see the apparatent (sic) higher interest rate offered on the ,monthly limit accounts.

No, you'll always earn more with the higher rate.

Maybe we're talking slightly different scenarios.

If you have £100, then clearly 6% will get you more than 5%.

But if you put in £100 a month limit at 6%, you'll get less over a year, than you would putting in £1200 in one go at 5% in a fixed bond.

£1200 at 5% gets you £60 over a year
£100 a month compounding at 6% gets you £40.25 over a year

martyp

jimjames said:

If you're switching out of fixed rates and paying an interest penalty to do so then you need to make sure that it's actually worthwhile. The rates you're mentioning are not instant access unless you're quoting regular saver accounts.

Thanks, all the ones I have at the moment are linked savings accounts to my current accounts aside from one or maybe two. The 6.17% is easy access but all except the 2.5% are limited on deposits.
For easy access I was most tempted by Chip. I believe the next highest required a £1k minimum deposit each time which I can't be sure to do as like the ability to pay in smaller amounts.