Maximising interest with 2 high rate savings accounts.

Mungy32

I want to maximise the returns on £6000 I have saved.  while researching I found that for 1 year I could use:
 
MoneyBox easy access ISA variable 5.05%
Santander Edge saver 6% variable (balance limit of £4000)
Principality Regular saver 7.5% 6 months fixed (£200 p/month limit balance limit £1200) 

If i put £4000 in the edge saver and £2000 in the Moneybox ISA paying the Principality Reg Saver £200 per month for 6 months. I could then take the savings from the Regular saver and put it into the ISA for the rest of the year. 

Im terrible with Maths and im new to saving/investment, but from what I can see, this comes out slightly better than just using the ISA for the whole £6000. contingent on when the interest gets calculated lines up correctly.

have i been researching a load of old nonsense or does this actually work? 

AI seems to think that when the interest is calculated or paid is where I can make this work.  
  

eskbanker

You'll maximise the interest paid if you save as much as possible into the account(s) with the highest rate(s) at any given point in time, measured net of any tax.

There's a regular saver calculator on here that illustrates this:

https://www.moneysavingexpert.com/savings/regular-savings-calculator/

flaneurs_lobster

Fairly easy to get two Edge savers @ 6%. Can feed the RS from them.

Are you earning enough interest elsewhere to make using an ISA worthwhile (although ISA rates, at least in the short term, are beating many non-ISA EA account rates).

There are other regular savers available at 7% but they would need current accounts as prerequisites.

Mungy32

flaneurs_lobster said:

Fairly easy to get two Edge savers @ 6%. Can feed the RS from them.

Are you earning enough interest elsewhere to make using an ISA worthwhile (although ISA rates, at least in the short term, are beating many non-ISA EA account rates).

There are other regular savers available at 7% but they would need current accounts as prerequisites.

yes, i have a First Direct regular saver 7% account. but thats separate from this atm.

I basically have £6000 in a 3% ISA. I shopped around and can find plenty of ISA's and savings accounts that do much better rates.

While shopping around I noticed the reg savers rates and went down a rabbit hole trying to make high interest savers return more than the best ISA I could find. (5.05% moneybox or 212 trading)

This way seems to work, but its very close to just putting it all in the ISA. plus being variable rates It could all fall apart pretty quick

Eco_Miser

Having the maximum amount allowed in the highest rate (AER - after tax if some are ISAs) accounts will always give the highest return. If the rates are close, you may consider the extra hassle not worthwhile. The dates the interest is actually paid is largely irrelevant (unless you want to spend it immediately) as the AER calculation gives the equivalent 1 payment a year rate. 

Because Regular Saver have an increasing balance, the amount of interest may be less than you expect if you mis-calculate the amount it is paid on (many people do).

After the 6 month RS matures, you could probably start again with a new one, depending on what is available then.

While many RS rates are variable, and could fall, what tends to happen is that the current issue is withdrawn (but continues at the same rate for those who have it), and a new issue at a lower rate is put on sale.

alfred64

Russian banks are  raising deposit rates, with some offering rates as high as 23% for specific savings accounts.

(But may not be a good idea to get involved.)

Albermarle

Having the maximum amount allowed in the highest rate (AER - after tax if some are ISAs) accounts will always give the highest return. If the rates are close, you may consider the extra hassle not worthwhile.

By my calculation the benefit will be only £15. Maybe a bit more if the easy access ISA rates drop during the 6 months.

nottsphil

flaneurs_lobster said:

Fairly easy to get two Edge savers @ 6%. Can feed the RS from them.

But the second one must be a joint one, right?

flaneurs_lobster

nottsphil said:

flaneurs_lobster said:

Fairly easy to get two Edge savers @ 6%. Can feed the RS from them.

But the second one must be a joint one, right?

..or a second one hangs off a second sole current account.

ThePirates

I have 2 sole Edge accounts and 2 Edge savers.