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Which account is best

edited 30 November -1 at 1:00AM in Savings & Investments
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RachaelRRachaelR Forumite
18 posts
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edited 30 November -1 at 1:00AM in Savings & Investments
I am about to get a relatively small lump sum and regular monthly pension payment and want to save the lump sum and have the monthly payment paid monthly into the same account. Anyone know what is the best savings account to do this in please. I am not planning on touching it for a few years. Many thanks

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  • xylophonexylophone Forumite
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    This would probably not give you the maximum interest.

    What are the amounts involved?
  • RachaelRRachaelR Forumite
    18 posts
    Fifth Anniversary 10 Posts Combo Breaker
    xylophone wrote: »
    This would probably not give you the maximum interest.

    What are the amounts involved?

    £15000 and around £200 a month
  • brockleebrocklee Forumite
    3 posts
    I also am in a similar situation. There's a lot of mobile accounts and regular bank accounts to choose from it's hard to differentiate.
  • Terry_TowellingTerry_Towelling Forumite
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    If it is savings you are after rather than investments there are many options. If you scroll to the top of the screen and click on the banking and saving button you will get plenty of info. Apart from that, here are a few ideas but none of them involve using a single account. If you don't want any faff of multiple accounts stop reading now!

    You might consider a Nationwide FlexDirect current account and a TSB Classic Plus current account. Neither requires any direct debits to get interest but they do have minimum pay-in requirements.

    So, deposit £2500 in a FlexDirect because it will pay you 5% interest for the first 12 months on balances up to £2500. Then deposit £1500 in a TSB Classic Plus account because this will pay you 3% (indefinitely) on balances up to £1500. Then set up same-day standing orders to switch £1000 between the two accounts. Each month you will want to move the interest out because amounts in excess of the limits do not receive interest.

    That takes care of £4K - but you will need to review arrangements in 12 months when the Nationwide account rate drops to 1%.

    Depending how many years you wish to leave the other £11K tied up, there are numerous fixed term accounts offering over 2% PA. These can be a bit of a gamble if interest rates move upwards in the near future and you've committed to, say, 5 years. Conversely, they may be good if rates move down.

    You may also want to open current accounts with other banks that offer 5% regular savers for your £200 per month. Alternatively, there are 'notice accounts' that pay slightly more than instant-access ones. Paragon, for example, does a 120-day notice account paying 1.8%. As it says on the tin, you need to give 120 days notice of the intent to withdraw. The rate is variable, so you need to watch out for changes and new issues of the account that may be offering a higher rate. The account must have a minimum of £500 in it.

    NatWest does a Savings Builder account. As long as your balance increases by £50 per month, you will get 1.5% interest (up to £10K). You can put in as much as you like at any time and withdraw at any time. Balances over £10K receive less interest on the portion in excess.

    Marcus is an instant-access saver that is currently paying 1.5% PA (for the first year).

    There are plenty more options.
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