Savings account to send a fixed monthly value to a current account

k6chris

A family members has asked my help in setting up some kind of account that will drip feed them a small amount of money each month (to top up their salary) without them having the ability to access the capital (to avoid temptation / aid financial prudence).  They would be happy to give me the lump sum, but not sure that is the best / cleanest way.  What other options are there please?

ToastLady

A fixed savings account that pays out monthly might suit the bill. They would have no access to the capital for whatever term they choose. Probably better having in their name to avoid possible tax for you. Have a look at https://moneyfactscompare.co.uk/savings-accounts/fixed-rate-bonds/
You can do a full search and choose monthly in advanced search options.
A fixed rate ISA which pays out monthly may be another option. Again a search on the above website will help narrow the field for you.

jimjames

Definitely not a good idea to give you the money as it then becomes yours and any tax would be payable by you. But I guess if they trust you that much they could let you setup the account in their name so only you have access to it - might be against the T&Cs of the account though.

cloud_dog

There are a few easy access accounts that allow you to set up a repeating withdrawal, e.g. Ford Money and Gatehouse (I think).

The challenge you have is the restricted access bit.  The only thing I could suggest, and bear in mind I'm not sure there is a good option for this, would be to set up a savings account, e.g. Ford Money EA account, set up the link between their bank account and Ford, e.g. make a deposit, and then you keep the login details for the Ford account, and you set up the regular withdrawal.  You can advise them when the lump sum in Ford is running out and they can either top it up again or tou just stop the regular withdrawal.

Bobblehat

Charter Savings Bank's EA allows automatic repeat monthly withdrawals to the nominated account, but like cloud_dog suggests, you would have to make some sort of arrangement to deliberately block access to the deposited capital.

As it happens, CSB do have a 1 year Fixed Rate ISA that pays out monthly to nominated account, 90 day loss of interest might dissuade other withdrawals?

k6chris

Bobblehat said:

Charter Savings Bank's EA allows automatic repeat monthly withdrawals to the nominated account, but like cloud_dog suggests, you would have to make some sort of arrangement to deliberately block access to the deposited capital.

Thanks.  Where does it specify this, they do not seem to mention it on their website??

Barkin

FWIW... I have an EA account with Skipton that will allow me to set up regular withdrawals to a nominated account.

Not sure if that applies to all of their accounts though - I only have the one, and it's no longer available to new customers.

Bobblehat

k6chris said:

Bobblehat said:

Charter Savings Bank's EA allows automatic repeat monthly withdrawals to the nominated account, but like cloud_dog suggests, you would have to make some sort of arrangement to deliberately block access to the deposited capital.

Thanks.  Where does it specify this, they do not seem to mention it on their website??

Good question! I couldn't find it documented ... but it is there! Under the "Make a Transaction" section of your account, you can then choose 3 options,1- ASAP, 2-Choose another Date, 3-Regular Transfer.

See the bottom section of the screenshot .........



Regarding the very last note on the screenshot above .... if you were to choose the FR ISA, only the monthly interest can be paid away ... which I think is what you wanted. With an EA account, you can specify the exact amount to be regularly paid out, and frequency too.

Sarahspangles

Barkin said:

FWIW... I have an EA account with Skipton that will allow me to set up regular withdrawals to a nominated account.

Not sure if that applies to all of their accounts though - I only have the one, and it's no longer available to new customers.

I was going to suggest the Skipton Easy Access Saver but it only pays 3.15%. The best rates are Loyalty/Member Bonus products, maybe you have the same Bonus Saver as I do. Issue 10 is paying 4.15% and can easily be set up for a monthly standing order.

The problem if you want loyalty products is that you have to decide who to 'risk' opening a regular saver with first!

Bobblehat

Barkin said:

FWIW... I have an EA account with Skipton that will allow me to set up regular withdrawals to a nominated account.

Not sure if that applies to all of their accounts though - I only have the one, and it's no longer available to new customers.

I have a Skipton EA and a Charter EA .... chose the latter to use to top up my CA for monthly SO's to RS's ... just because the interest rate was quite a bit better with Charter. YMMV. 

I used to use my Gatehouse ERG (EA) account for the CA top-up but they slashed the rate below Charter at the end of March.