Drip feeding

sandhead1

After reading advise given on MSE I set about the process of opening an Easy Access savings account with the intention of depositing a lump sum say just for example £5,000 and using the Easy Access account to drip feed my Regular saver account .

I bank with the Co-operative bank and can get 7% interest with their Regular saver account.

In this way I earn interest on both accounts - in theory.

Great, this will be straight forward I thought - wrong.
I looked at opening an Easy access account with Charter Trust, and you have to nominate an existing current account before you can get an account opened (as with most of the other Easy access savings accounts out there)
This is where things started to go wrong.

Paying money into an Easy Access account, with Charter Trust
Firstly the nominated account is the only account that can be used to fund the Easy Access account.
There are no limits on withdrawals and the full balance can be taken out at any time, however, you are only able to make withdrawals to the nominated account.

So that kind of throws a spanner in the works.
I can't put a lump sum into the Regular Saver account (the nominated account) in order to fund the Easy Access Account because the Regular Saver account only allows a max monthly deposit of £250 (most Regular Saver accounts have a varying low max monthly deposit allowances)

If most of the Easy Access saving accounts available can only receive funds from a nominated current account and yet you can not use the nominated account (in my case a Regular Saver account) to fund the Easy Access savings account what the heck are you supposed to get the ball rolling

Maybe I am being a bit thick but I can not figure this out.

Any thoughts

wmb194

sandhead1 said:

After reading advise given on MSE I set about the process of opening an Easy Access savings account with the intention of depositing a lump sum say just for example £5,000 and using the Easy Access account to drip feed my Regular saver account .

I bank with the Co-operative bank and can get 7% interest with their Regular saver account.

In this way I earn interest on both accounts - in theory.

Great, this will be straight forward I thought - wrong.
I looked at opening an Easy access account with Charter Trust, and you have to nominate an existing current account before you can get an account opened (as with most of the other Easy access savings accounts out there)
This is where things started to go wrong.

Paying money into an Easy Access account, with Charter Trust
Firstly the nominated account is the only account that can be used to fund the Easy Access account.
There are no limits on withdrawals and the full balance can be taken out at any time, however, you are only able to make withdrawals to the nominated account.

So that kind of throws a spanner in the works.
I can't put a lump sum into the Regular Saver account (the nominated account) in order to fund the Easy Access Account because the Regular Saver account only allows a max monthly deposit of £250 (most Regular Saver accounts have a varying low max monthly deposit allowances)

If most of the Easy Access saving accounts available can only receive funds from a nominated current account and yet you can not use the nominated account (in my case a Regular Saver account) to fund the Easy Access savings account what the heck are you supposed to get the ball rolling

Maybe I am being a bit thick but I can not figure this out.

Any thoughts

Your regular saver shouldn't be your nominated account, it should be a current account. You fund the regular saver and the easy access account from a current account. The drip feed from the easy access savings account can go via the current account.

You could look at a less restrictive savings account e.g., Chase's savings account isn't restricted by a nominated account and you can transfer money from it to wherever you like. 

sandhead1

Hi,

Thanks for the response.

So I would have to fund (in this example ) the Charter Trust Easy Access account from my current account then withdraw from the Easy Access account back into my current account then send regular payments from my current account to my Regular Saving account. The only saving grace to this (from my simplistic point of view) frankly long winded and illogical system is the potential interest rate difference between the Easy access account and my current account. Nothing is straight forward.

In order (correct me if I am wrong) to open a  Chase Bank savings account I would first have to open a current account with them which makes the whole process even more complicated than it already is.

Why is it what I wanted to achieve so difficult?

I just wanted to open a Savings account,fund it,then send payments from it directly into a Regular saving account,this seems like it is too much to ask without having to jump through hoops?

eskbanker

It really isn't rocket science, but if you're unwilling to make two monthly transfers instead of one then you could always have both the regular saver and the easy access with the same institution, although you'd be sacrificing rate for convenience....

sandhead1

Hi,

Thank you for your response.

I certainly am not unwilling to make two monthly transfers at all if that is what is needed.

Trying to get the best interest rate is the goal, I just didn't realize that the process would be this long winded 

wmb194

sandhead1 said:

Hi,

Thanks for the response.

So I would have to fund (in this example ) the Charter Trust Easy Access account from my current account then withdraw from the Easy Access account back into my current account then send regular payments from my current account to my Regular Saving account. 

The only saving grace to this (from my simplistic point of view) frankly long winded and illogical system is the potential interest rate difference between the Easy access account and my current account. Nothing is straight forward.

In order (correct me if I am wrong) to open a  Chase Bank savings account I would first have to open a current account with them which makes the whole process even more complicated than it already is.

Why is it what I wanted to achieve so difficult?

I just wanted to open a Savings account,fund it,then send payments from it directly into a Regular saving account,this seems like it is too much to ask without having to jump through hoops?

I'm afraid it's the nature of using regular savings accounts. You're only talking about three accounts, two institutions and two steps once a month: 1. withdrawal from Charter to Co-op Current, 2. Co-op Current to Co-op RS. That's nothing really and with a bit of practice it becomes trivially easy.

Chase's savings account is unusual in that it allows you to setup standing orders so for the (minor) hassle of opening a current account you could automate the process and not need to do the 'shuffle' manually every month.

eskbanker

Fair enough, it just seemed that you were making a bit of a mountain out of a molehill:

sandhead1 said:

frankly long winded and illogical system

[...]

Nothing is straight forward.

[...]

the whole process even more complicated than it already is.

Why is it what I wanted to achieve so difficult?

[...]

too much to ask without having to jump through hoops?

Those wanting to reap the benefits of maximising interest by operating multiple accounts are expected to be prepared for some minor admin!

Barkin

sandhead1 said:

Hi,

Thank you for your response.

I certainly am not unwilling to make two monthly transfers at all if that is what is needed.

Trying to get the best interest rate is the goal, I just didn't realize that the process would be this long winded 

Crumbs!

How about...let's say the RS is £250/monthly.

1. Deposit £3k in an EA savings account.
2. Set up a standing order from a current account, to deposit £250/month into the RS account.

Those 2 steps are one-offs.

Then, every month, transfer(*) £250 from the EA savings account to the current account.

So one manual transaction every month.

Job done.

(*) there are EA savings accounts that could automate this, but you may sacrifice rate for convenience.

ThePirates

I use a Santander Edge Saver paying 6% to drip feed my regular savers. You can pay directly from the Edge Saver to any number of Regular Savers with any bank.
You need an Edge current account, easy enough to set up without having to pay the monthly fee.

sandhead1

Hi

Thank you all for taking the time to respond to me,it is much appreciated.

I will look into all of your suggestions and see which works best.

I will let you know how I get on.