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  • FIRST POST
    • MSE Amy
    • By MSE Amy 30th Jun 14, 10:42 AM
    • 28Posts
    • 36Thanks
    MSE Amy
    5% Savings Loophole
    • #1
    • 30th Jun 14, 10:42 AM
    5% Savings Loophole 30th Jun 14 at 10:42 AM

    Click reply below to discuss. If you havent already, join the forum to reply. If you arent sure how it all works, read our New to Forum? Intro Guide.
Page 1
    • save4u
    • By save4u 10th Sep 14, 11:56 AM
    • 35 Posts
    • 13 Thanks
    save4u
    • #2
    • 10th Sep 14, 11:56 AM
    • #2
    • 10th Sep 14, 11:56 AM
    One way to minimize your initial outlay is to open two TSB accounts in your partners name and send the first 500 STO from your main external account, 'bounce' the 500 between each (you->partner->you->partner->you) and return it from the last account into your main account. It works perfectly for a 5% interest gain. Otherwise for no additional outlay use your 500 from your first TSB account (reducing it temporarily to 1500) into your main account and return it starting at step one above...it's called recycling!!
    Save a Lert
    • esmediaz
    • By esmediaz 10th Sep 14, 12:44 PM
    • 6 Posts
    • 5 Thanks
    esmediaz
    • #3
    • 10th Sep 14, 12:44 PM
    • #3
    • 10th Sep 14, 12:44 PM
    Great guide, except that having two FlexDirect accounts both with 5% interest seems only to be possible for join accounts...

    Can I open more than one FlexDirect account?

    You can open up to four Nationwide current accounts. However, under the terms and conditions of this account customers are only entitled to one promotional credit interest rate of 5% AER. The only permitted exception to receive more than one promotional rate is if the additional account is held in joint names.
    Any additional FlexDirect accounts held will result in the credit interest rate being reduced from 5% to 1% within 3 working days of the account being opened. If you have previously held a FlexDirect account in the last 12 months, you will not be entitled to the introductory rate or offer under a new agreement and therefore you will receive the standard 1% AER interest rate.
    (From Nationwide FAQ pages, sorry can't post a link)
    • eskbanker
    • By eskbanker 10th Sep 14, 12:55 PM
    • 10,414 Posts
    • 12,692 Thanks
    eskbanker
    • #4
    • 10th Sep 14, 12:55 PM
    • #4
    • 10th Sep 14, 12:55 PM
    Great guide, except that having two FlexDirect accounts both with 5% interest seems only to be possible for join accounts...
    Originally posted by esmediaz
    Yes, this is referred to in the MSE article - the last column of the summary table ("How many can you have?") clearly states "2 (1 must be joint)" for FlexDirect, which is correct and consistent with your extract from the Nationwide site.
  • hcpratchett
    • #5
    • 10th Sep 14, 1:30 PM
    Just to clarify
    • #5
    • 10th Sep 14, 1:30 PM
    Hi Guys,

    I'm new to MSE and I'm probably being a bit thick, but I wanted to clarify something about the accounts that require say 500 to be paid in each month, does that 500 have to stay in there for a certain amount of time?

    I know in the article it said move it in and straight back out again, but I just wanted to double check in case I had misunderstood!

    Thanks

    Hannah x
    • Reaper
    • By Reaper 10th Sep 14, 1:43 PM
    • 6,536 Posts
    • 4,891 Thanks
    Reaper
    • #6
    • 10th Sep 14, 1:43 PM
    • #6
    • 10th Sep 14, 1:43 PM
    I'm new to MSE and I'm probably being a bit thick, but I wanted to clarify something about the accounts that require say 500 to be paid in each month, does that 500 have to stay in there for a certain amount of time?

    I know in the article it said move it in and straight back out again, but I just wanted to double check in case I had misunderstood!
    Originally posted by hcpratchett
    The article is right. Just moving it in and straight out again is sufficient.
    • Reaper
    • By Reaper 10th Sep 14, 1:51 PM
    • 6,536 Posts
    • 4,891 Thanks
    Reaper
    • #7
    • 10th Sep 14, 1:51 PM
    • #7
    • 10th Sep 14, 1:51 PM
    The article says:
    Hang on a minute... you always say to max out a cash NISA before any other type of savings. Aren't you changing your tune? No, we're just getting creative. You've got your 15,000 cash NISA allowance to use by 5 April 2015 when the current tax year ends, but as long as current account interest rates after tax trump cash NISA rates (which most do), the money is better off there for the short term.
    Annual ISA limits are now so high that only the wealthy need worry much about them. If bank accounts pay more interest after tax I suggest most people would be better off using these before resorting to ISAs, not just for the short term.
  • meggieb
    • #8
    • 12th Sep 14, 9:57 AM
    Thanks
    • #8
    • 12th Sep 14, 9:57 AM
    Thanks for highlighting this loophole, it takes a bit of time and patience to set it all up but now reaping the rewards. Just had notification of reduction in interest on my original savings account so I feel even better about it.
    • calcotti
    • By calcotti 25th Sep 14, 12:34 PM
    • 2,645 Posts
    • 1,768 Thanks
    calcotti
    • #9
    • 25th Sep 14, 12:34 PM
    TSB illogical decision making
    • #9
    • 25th Sep 14, 12:34 PM
    I am currently living off savings with no earned or benefit income having chosen to do unpaid voluntary work for the timebeing. Wanted to improve my returns by taking out a Classic Plus account to get the 5% interest on 2,000. Am quite capable of making monthly deposits of 500 from other savings. Since this is the only operating requirement and if I don't make the deposit it's my loss as I wouldn't get the interest there is no risk to the bank but they have tuned me down. Although they would let me have the ordinary Classic account (which of course is of no interest to me as it does have the interest).

    Very helpful and pleasant staff in the complaints department but the decision by the relevant department appears completely illogical (think it was the lending department which in itself is daft as I am not asking for a loan or overdraft!).

    TSB - the bank that likes to say no! Not so different after all.
    • colsten
    • By colsten 25th Sep 14, 1:39 PM
    • 10,442 Posts
    • 9,638 Thanks
    colsten
    Duplicate of your post in this thread, calcotti. No need to post things twice as people will read threads on more than one board.
  • riteofreply
    5% savings loophole - 19,000 or 14,000?
    "So let's imagine you want to open two Nationwide FlexDirect*, two Tesco Bank and two TSB Classic Plus accounts to earn over 4% on up to 19,000"

    I must be doing the sums wrong, but using the example quoted I make the amount you can save to be 14,000?
    • YorkshireBoy
    • By YorkshireBoy 12th Nov 14, 10:30 AM
    • 30,685 Posts
    • 18,690 Thanks
    YorkshireBoy
    "So let's imagine you want to open two Nationwide FlexDirect*, two Tesco Bank and two TSB Classic Plus accounts to earn over 4% on up to 19,000"

    I must be doing the sums wrong, but using the example quoted I make the amount you can save to be 14,000?
    Originally posted by riteofreply
    Previous discussion...


    http://forums.moneysavingexpert.com/showthread.php?t=5093350
    • kingrulzuk
    • By kingrulzuk 12th Nov 14, 3:52 PM
    • 1,258 Posts
    • 568 Thanks
    kingrulzuk
    Good Info. I have 3x BOS and No ISA
    What happens if you push this button?
    • st1sof
    • By st1sof 12th Nov 14, 4:57 PM
    • 5 Posts
    • 4 Thanks
    st1sof
    getting my money to work as hard for me as poss
    Signed up to buy a new house and started raising the cash and as I will need it in pretty short order tying up in fixed rates not an option so I've utilised the current account available on the market to store the savings whilst the house is slowly being built.

    In Interest Rate order, I have:

    Nationwide FlexDirect 1x2,500@5%
    TSB Classic Plus 2x2,000@5%
    Club Lloyds 1x5,000@4%
    Bank of Scotland Classic Vantage 2x5,000@3%
    Santander 123 1x20,000@3%-2pcm

    The Mrs and I are about to open a joint Santander 123 so from the article it then looks like we could get a Club Lloyds (joint), NW FlexDirect (joint) and one further Tesco Bank account.

    Does anyone know how many Bank of Scotland Classic Accounts an individual can have?

    I also have a few regular saver accounts that allow early closure without drastic penalties.

    The balance I had then opted to pay into a Birmingham Midshires Online Extra @ 1.6% but they have just dropped the rate to 1.35% so it'll stay in a Nationwide Loyalty Saver @1.5%. Anyone know of anything better?

    st1sof
    • badger09
    • By badger09 12th Nov 14, 6:05 PM
    • 6,916 Posts
    • 6,527 Thanks
    badger09
    Individual can have 3 x BoS Classic Vantage accounts.

    You mention additional Tesco, but no Tesco accounts in your list? Individual can have 2.

    Also Club Lloyds for your wife?
    Club Lloyds Monthly Saver each?
    • st1sof
    • By st1sof 12th Nov 14, 8:50 PM
    • 5 Posts
    • 4 Thanks
    st1sof
    Hi Badger09,

    Thanks for responding. I do have 1 Tesco CA, table updated below.

    In Interest Rate order, I have:

    Nationwide FlexDirect 1x2,500@5%
    TSB Classic Plus 2x2,000@5%
    Club Lloyds 1x5,000@4%
    Bank of Scotland Classic Vantage 2x5,000@3%
    Tesco Bank Account 1x3,000@3%
    Santander 123 1x20,000@3%-2pcm

    Club Lloyds Monthly Saver already in operation.

    Getting individual accounts for the Mrs is asking a lot really. It's taken ages to persuade her to go for the Santander 123 and only because you can squirrel away 20k in one go. She's not interested in all the hassle of setting up these accounts and looking after them so I choose to fight the battles I have a chance to win, joint accounts are such a battle.

    st1sof
    • badger09
    • By badger09 12th Nov 14, 9:02 PM
    • 6,916 Posts
    • 6,527 Thanks
    badger09
    Is your wife buying this house with you?

    Does she have savings in accounts earning less than 3%?

    If so, she is definitely missing a trick

    Can you persuade her to read this forum?

    If so, as she is a woman, so obviously is blessed with superior intellect, then I'm sure she'll see the advantage of opening her own high interest current accounts. It really isn't much hassle
    • Futuristic
    • By Futuristic 13th Nov 14, 12:18 AM
    • 805 Posts
    • 408 Thanks
    Futuristic
    Would this work (I assume yes, just making sure)

    Club Lloyds current account - 5000 initial
    Setup 500 standing order from my main bank account of 500 say 15th of each month and setup standing order from Lloyds to my main account 16th of each month?

    I assume if I add another account, eg tsb I can do Main > Lloyds > TSB > Main

    Thanks!
    • B_G_B
    • By B_G_B 13th Nov 14, 12:51 AM
    • 478 Posts
    • 471 Thanks
    B_G_B
    Would this work (I assume yes, just making sure)

    Club Lloyds current account - 5000 initial
    Setup 500 standing order from my main bank account of 500 say 15th of each month and setup standing order from Lloyds to my main account 16th of each month?

    I assume if I add another account, eg tsb I can do Main > Lloyds > TSB > Main

    Thanks!
    Originally posted by Futuristic
    Best not to assume.

    A minimum of 1500 required to waive the monthly fee. This funding can be moved back out immediately.

    At least 2 DDs paid out each month to gain interest.

    See T&Cs.
    • Futuristic
    • By Futuristic 13th Nov 14, 1:11 AM
    • 805 Posts
    • 408 Thanks
    Futuristic
    Best not to assume.

    A minimum of 1500 required to waive the monthly fee. This funding can be moved back out immediately.

    At least 2 DDs paid out each month to gain interest.

    See T&C’s.
    Originally posted by B_G_B
    Yup my bad. Thx
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