Citibank closing - please help me understand offers

GeeBeeCee

Citi is about to close their UK bank. I've banked with them for 20 years but am now having to switch.

I have a lump of cash that I'd like to continue earning interest on. I also live on that lump sump - I don't make regular payments in: I was previously self employed but had been caring for my partner 24/7 so I stopped work in 2021 but didn't claim any benefits. I am now bereaved.

I'm completely confused by offerings such as: 7% interest on up to £300/month (First Direct). And similar from Nationwide, along with the stipulation that you pay in £1000+ per month to earn interest.

Are there any banks that keep it simple & just pay interest on the full amount the customer has banked with them, without limiting the interest to £300 of your savings (what?!) or stipulating monthly deposits or they drop the interest rate?

Time is running out so I'd be grateful for any help. Thank you.

MorningcoffeeIV

GeeBeeCee said:

Are there any banks that keep it simple & just pay interest on the full amount the customer has banked with them, without limiting the interest to £300 of your savings (what?!) or stipulating monthly deposits or they drop the interest rate?

Loads and loads of them. Have a look at any comparison site of savings accounts to see what takes your fancy.

The FD regular saver account is great as by the end of the year you're getting 7% on £3,600 - many people on these boards use it. If all your savings are getting more than 7%, then it won't be of interest to you. However, that's unlikely to be the case.

WillPS

I'm sorry for your loss.

As a first step, ignore regular savings like First Direct's and Nationwide's. These are designed to only accept a 3 figure sum each month, so not suitable for a lump sum. (You can benefit from these later on by drip-feeding in to them, if you like).

What you need is one or both of Easy Access Savings (which you can access any time) and Fixed or Notice Savings (where your access is limited for a period but the interest rate is usually higher). 

If you want to keep things super-simple then open an Easy Access saver with Ulster Bank, move everything in to there, then work out your next steps in terms of creating Fixed Term accounts, regular savings and anything else.

friolento

Very long list of savings accounts: https://moneyfactscompare.co.uk/savings-accounts/

There is also the Savings forum: https://forums.moneysavingexpert.com/categories/savings-investments

GeeBeeCee

Thanks for responding Morning Coffee. I'm getting nowhere with comparison sites hence coming here to ask advice.

The FD Regular Saver "save between £25 and £300 a month, up to £3,600 per year" is the same as I said I'm trying to avoid.

I don't want to do monthly deposits. I don't want interest limited the a fixed amount.

I'm looking for an account where I can:

1. deposit a lump sump of £40,000

2. Earn interest on all of it

3. Not be forced to leave it untouched

4. Not be forced to make regular deposits

Once upon a time this was normal banking. Now there's clauses, demands, limits & rules that make people jump through hoops. I just want to bank my money, use what I need and earn interest on what's in there.

Reddleman79

Hargreaves Lansdown active savings is flexible and easily managed.

WillPS

GeeBeeCee said:

Thanks for responding Morning Coffee. I'm getting nowhere with comparison sites hence coming here to ask advice.

The FD Regular Saver "save between £25 and £300 a month, up to £3,600 per year" is the same as I said I'm trying to avoid.

I don't want to do monthly deposits. I don't want interest limited the a fixed amount.

I'm looking for an account where I can:

1. deposit a lump sump of £40,000

2. Earn interest on all of it

3. Not be forced to leave it untouched

4. Not be forced to make regular deposits

Once upon a time this was normal banking. Now there's clauses, demands, limits & rules that make people jump through hoops. I just want to bank my money, use what I need and earn interest on what's in there.

Just avoid regular, fixed and notice savings if you don't want this complexity Ulster Bank are currently top of the charts in this regard, unless you're eligible for an account with Chorley BS.

TheElectricCow

GeeBeeCee said:

Thanks for responding Morning Coffee. I'm getting nowhere with comparison sites hence coming here to ask advice.

The FD Regular Saver "save between £25 and £300 a month, up to £3,600 per year" is the same as I said I'm trying to avoid.

I don't want to do monthly deposits. I don't want interest limited the a fixed amount.

I'm looking for an account where I can:

1. deposit a lump sump of £40,000

2. Earn interest on all of it

3. Not be forced to leave it untouched

4. Not be forced to make regular deposits

Once upon a time this was normal banking. Now there's clauses, demands, limits & rules that make people jump through hoops. I just want to bank my money, use what I need and earn interest on what's in there.

What you’re looking for is typically called an “Easy access account” and practically all banks will offer one of these, although the exact name each bank uses for this may be different. For First Direct it is simply called “Savings Account” and at Nationwide it’s the “Instant Access Saver”. These accounts will have few, if any, restrictions and the biggest difference between them is usually the interest rates they offer.

These are the kind of accounts you want to look for from what you’ve described, although the interest on these two specific accounts isn’t especially high so that’s where shopping around would come in.


The First Direct account you’ve seen is what’s known as a “Regular savings account” which is another common product offered by many banks. These accounts will have limits on monthly deposits and restrictions/terms to comply with, but typically can offer a much larger interest value on a smaller overall sum of money (although they cannot accept large lump sum deposits, so not what you’re after). 

GeeBeeCee

Thank you very much for your help, Reddleman79 & WillPS. I'll have a look at those accounts now.

born_again

GeeBeeCee said:

Thank you very much for your help, Reddleman79 & WillPS. I'll have a look at those accounts now.

https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/

Rawrzy

Realistically you're probably going to have to have a separate current account and savings account since current accounts don't really tend to have interest applied. If you've got a lump sum and don't want the hassle of transferring money into regular savers to get a bit extra money then you'd probably want to avoid the 7% first direct regular saver, or any other regular savers. It is worth it if you don't mind the hassle, and are fine locking the money away for the period, but it's not for everyone.

Which savings account you might want will depend on cirumstances, for example how often you'd want to access it. 

Something which I set up for a relative which is in a similar circumstance to you, ie quite a big lump sum they're living off while being bereaved, was the triple access saver at Coventry, it has a current interest rate of 5.2%. You can set it up so the interest gets paid away to another account(ie your current account), so I set that up for them and they're basically part living off the interest payments + pensions. If you set up those payments to be paid away monthly then the interest rate drops to 5.08% just due to no compounding, but having monthly payments does offer more stability if you're living off them. You can also withdraw from it 3 times a year if you need more money than that, say for a special occasion, or a big expense.

Alternatively if you want more access to it then you'd probably want to go with Ulster, which is also 5.2% and doesn't have withdrawal limit. The downside is I don't think the interest can be paid away automatically (so you'd have to keep manually withdrawing) and the application process might not be the smoothest since they do a lot of things by post.

As mentioned in a previous post Chorley is technically the highest interest rate account which allows any time withdrawals (though only 1 per year), but you have to live in their "catchment" area and there's no option of having interest paid away every month to your current account as far as I'm aware.

Now its worth noting both of those accounts are variable rate interest, so unfortunately they can drop the interest rate if they wish. The only way you're going to get a fixed interest rate is by fixing away your money for a given period. Ie lock your money away for a year at a given interest rate, but you wouldn't be able to access it for that period. Though some of them do offer the option of having the interest paid away every month.

If you want more interest rate security while still being able to withdraw you could maybe look into notice accounts. Where basically if you have a 90 day notice account, you have to give say 90 days notice for withdrawing, but that also means that they have to give the same amount of notice if they're changing interest rates. This isn't really any good if you know you might end up in a situation where you need money instantly though.