How to maximise my savings?

lancs_man

Hi folks

I've been banking with HSBC for quite a few years now, but their interest rates aren't particularly great so it's time for a change. After weighing up my options on MSE I've initiated a transfer of my cash ISA to Vida, and have already moved my easy access savings (about £32K) to Chase.

I was just wondering if there are any other ways to maximise my savings?

One option was to drip feed into a regular savings account (i.e. Monmouthshire Building Society at 6%), but is it worth the bother for what amounts to an extra £50 or so?

Alternatively, if I can spare £6K over the next 12 months, would it not earn more in a fixed saver account (i.e. Marcus at 4.9%)?

Just something to think about for now, but I'd welcome any input from people with more experience.

Brie

limited experience with high interest savings but I do have money in Premium Bonds on the off chance that might achieve something. And I know a lot of people shift to new accounts to get joining bonuses which may give a better return on a relatively small amount.

wmb194

https://forums.moneysavingexpert.com/discussion/6677005/how-to-maximise-my-savings

Whilst you're drip feeding a lump sum into a higher paying RS you keep the lump sum in the best paying instant access account(s) and overall you'll earn more than if you only kept it in the instant access account. It's up to you whether or not you think it's worth the effort but over the years the extra interest adds up.

If you're willing to do the work and admin a portfolio of RS' can be pretty lucrative: see the league table in the link below. Some people's average interest rates are >6%. This last week there's been a rush to open the 3x 8% Lloyds Banking Group RS'.

https://forums.moneysavingexpert.com/discussion/6670416/how-many-regular-savers-do-you-have-the-league-table/p1

Exodi

You talk about "ways to maximise my savings" but then say "is it worth the bother for what amounts to an extra £50 or so?", this seems like a bit of a contradiction?

Ironically you see most people would bite your arm off to get work paying around £50 per hour, but simultaneously would not spend the <1 hour it takes to administrate a RS.

It's also worth mentioning that the MBS one is far from the the best rate. I appreciate MSE might give the impression that the others are closed to people that don't bank with the bank in question, but most of the time you can simply open a current account (with no intention or obligation to ever use it) then right away open a RS - I know because I don't think I've ever used my FD current account!

https://www.moneysavingexpert.com/savings/best-regular-savings-accounts/#lloyds

Regular Savers are a very good way to maximise the effective interest rate on your savings, you will not find 6/7/8% on any Easy Access account. Once you've set the account up, it takes negligible maintenance. The most common reason we see for people being against them is because they don't understand the maths (e.g. they think they should earn the interest rate multiplied by the final balance and are confused why it ends up being half the amount, despite only having half the amount in the account on average across the year) - you don't seem to fall into this camp as your ~£50 comment confirms to me you a good understanding of the interest the RS will pay as well as the fact you will earn interest from the amount waiting to be drip-fed in an EA.

To be honest, outside of fixing the money, the only way to achieve higher reward than that will be to introduce risk (e.g. investing).

grumpy_codger

https://forums.moneysavingexpert.com/discussion/6677005/how-to-maximise-my-savings

… if I can spare £6K over the next 12 months, would it not earn more in a fixed saver account (i.e. Marcus at 4.9%)?

Regular saving accounts are an ideal tool for saving £500 (or more) per month. With 8% regular savers it's about £100 (!) extra interest vs. 4.9%.

lancs_man

@Exodi

You talk about "ways to maximise my savings" but then say "is it worth the bother for what amounts to an extra £50 or so?", this seems like a bit of a contradiction?

Perhaps "maximise" was the wrong word? Ideally I'd like to get as much as I reasonably can from my savings, but without things getting overly complicated or unmanageable, especially as I'm new at this. So I don't necessarily need to be chasing every last penny. £50 might be worth the effort, but £5? Probably not.

I'm a bit wary of having too many current accounts on the go at once, even if they aren't being used.

Investing is something I don't feel ready for at the moment.

Regular saving accounts are an ideal tool for saving £500 (or more) per month. With 8% regular savers it's about £100 (!) extra interest vs. 4.9%.

Yes, I think my maths was a bit off! While an FS could potentially earn more than drip feeding the same amount into an RS, I forgot to consider that my EA would be earning less over the same period.

Exodi

lancs_man

Perhaps "maximise" was the wrong word? Ideally I'd like to get as much as I reasonably can from my savings, but without things getting overly complicated or unmanageable, especially as I'm new at this. So I don't necessarily need to be chasing every last penny. £50 might be worth the effort, but £5? Probably not.

I'm a bit wary of having too many current accounts on the go at once, even if they aren't being used.

Investing is something I don't feel ready for at the moment.

I'm guessing you've never used a regular saver before because anyone that had would be puzzled by any suggestion they are 'overly complicated' or 'unmanageable'. Many set up a monthly standing order with their bank to automatically send the money to the account each month, meaning they only time they need to get involved with it is at the start setting it up or at the end withdrawing from it. I suspect we've spent more time commenting in this thread than I've spent administrating my FD regular saver this year.

FWIW you don't need to open tons of current accounts (though unless you need to borrow money in the near future, I'm curious why you're wary of this), if you have £6000 spare per year (£500 per month) - that's 1 or 2 regular savers (1 if you use MSB which doesn't require a current account).

Nonetheless, I'm getting the impression that you may only be open to EA (and potentially fixed rate) accounts, the best resource for checking the best EA accounts is here (be sure to sort by rate):

https://moneyfactscompare.co.uk/savings-accounts/easy-access-savings-accounts/

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/82077066#Comment_82077066

Investing is something I don't feel ready for at the moment.

Do you not have a pension you are contributing to? Unless you are in the public sectore than your pension will be held in investments.

lancs_man

@Exodi I meant that I don't want things overall to become too complicated. I'm used to having all my money in one bank, so my reluctance is in opening a whole bunch of different accounts all at once. Otherwise I have no issue opening an RS, it's just something I'd like to ease myself into.

Middle_of_the_Road

https://forums.moneysavingexpert.com/discussion/comment/82077666#Comment_82077666

Having 'all your money in one bank' is not advisable. There are many instances where people have been unable to access any of their money, when the bank freezes the account for suspected fraud or money laundering, or the bank has system issues.

It's recommended to have at least one additional current account as a backup.

As you now have a Chase current account and their associated boosted saver, you are in a better position all round. It would be wise to keep some funds in your existing HSBC account though, just in case.