Is it feasible to have multiple savings accounts?

sherbie28

Last year my mum received an unexpected inheritance and at the time my parents put the majority in NS&i and some in a high street bank savings account. At the moment with the rate drops they can get better deals elsewhere. I was contemplating looking into splitting it up into banks which aren't linked so they get the fscs protection but have a better rate than they are currently getting. Do people have multiple savings accounts? I've done the numbers and it would be worthwhile. For e.g. NS&i currently 3.5% but Coventry offering 4.85%. Realistically, is the 4.85% due to drop and I'm wasting my time? Are there any pitfalls I should look out for? In hindsight has anyone done it and wish they hadn't?

QrizB

I'm pretty sure there are people on this forum with numbers of accounts that run well into double figures. Not sure if anyone gets to triple figures, but it would be interesting to find out!

masonic

Hmm, do people of the MSE Savings & Investments forum have multiple savings accounts. I have a feeling you are about to find out how deep the rabbit hole goes.

eskbanker

Short answer to the core question is yes, multiple savings accounts are held by many on here.

When people are talking about splitting savings across multiple providers for FSCS protection purposes, it usually begs the question of whether or not they really need to keep so much accessible in cash deposit terms, rather than investing, either standalone or within pensions?

trickydicky14

If you are prepared to put in the work and chase the rates then yes it can be a good idea. You don't say how much money you have to deal with, if its a lot consider putting some of it in fixed term accounts for one, two years so then you know the rate will not change. If it's long term savings then many would say including me, invest some of it on the stock market if you do, it needs to be left alone for as least 5 years or more. This may not be of interest to you but it would generally give you better returns in the long run. A lot of folks just want an easy life and put money in a low interest account and forget it but get little back.

chipsdog5a

I have done the same thing using Flagstones, you can select lots of different accounts and they all appear on one page in the Flagstones portal  Really easy to use and they tell you if you are covered by the £85k rule

lr1277

Just be aware, if either parent receives a private pension (or any other income taxable at sour ce), HMRC might change their tax code such that more tax is taken and the person receives a smaller income. Might meaning having to submit a tax return to either return any overpaid tax or pay any extra tax required.

The other thing to remember if either person's income from interest is over £10k, they they will have to submit a tax return.

Albermarle

Last year my mum received an unexpected inheritance and at the time my parents put the majority in NS&i and some in a high street bank savings account.

We get regular questions on the forum like ' I just received an inheritance , what should I do with it'

The answer depends a lot on the personal circumstances of the person asking the question, but the answer is rarely to put it all in savings accounts long term. So maybe a proper rethink is in order.
If it really is a lot of money, some professional advice could be useful.

Ruger22

Yes, it is feasible. I have over 40 accounts across at least 14 banks.

I'm an 'interest rate chaser' so I will open a new account to get a higher interest rate. Most recently Chase with their 5% rate and 1% cashback.
I also open accounts to get bonuses given to new customers such as Raisin's £100 cash bonus last year.

I'm fortunate to have to worry about FSCS and will not go over the £85k limit per bank.

Some of the accounts have £0 or just a few pence in them as their interest rate dropped I moved my money on to 'chase the rate'.

Most are easy access, with one regular saver, five fixed rate, one cash ISA, one LISA, Premium Bonds and Revolut for Euro.

I use a documents app that syncs with my laptop and tablet to keep track of things.

jaypers

Get loads and keep a spreadsheet! 

DRS1

First the Coventry account is probably the Four Access Saver and that rate is variable so yes it will almost certainly go down soon.
Second whether your mum keeps the inheritance in cash or invests it, it would be a good idea to put as much as she can into an ISA.  The limit is £20k per tax year so she could put £20k in one now and another £20k in one after April 6.
You can have fixed rate accounts in an ISA as well as variable rates.  So Coventry have a Six Access ISA paying 4.55% variable or a Centrepoint  Fixed ISA paying 4.5% maturing at the end of May 2026.  As the 4.55% rate will probably go down to 4.3% the fix may be better.
Or she could go for a stocks and shares ISA for which people on here will predict fantastic returns but which may well not be her cup of tea.