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    • SnowWhite52
    • By SnowWhite52 9th Feb 18, 9:21 PM
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    SnowWhite52
    Savings account to pay regular bills
    • #1
    • 9th Feb 18, 9:21 PM
    Savings account to pay regular bills 9th Feb 18 at 9:21 PM
    I know interest rates are low, but what's the best savings account to pay money into monthly by standing order for annual bills such as car tax, insurance etc and unexpected bills such as a problem with the boiler, so that I can draw on it when I need to without penalties. Thanks
Page 1
    • MallyGirl
    • By MallyGirl 9th Feb 18, 9:29 PM
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    MallyGirl
    • #2
    • 9th Feb 18, 9:29 PM
    • #2
    • 9th Feb 18, 9:29 PM
    Probably a high interest bank account
    • Eco Miser
    • By Eco Miser 10th Feb 18, 1:16 AM
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    Eco Miser
    • #3
    • 10th Feb 18, 1:16 AM
    • #3
    • 10th Feb 18, 1:16 AM
    Maybe high interest bank accounts, and maybe high interest Regular Savings accounts. Either use those with easy access, or time the saver to mature just before the annual bill is due. This is what regular savers are intended for, though many use them just for general saving.
    Eco Miser
    Saving money for well over half a century
    • IanSt
    • By IanSt 10th Feb 18, 12:22 PM
    • 260 Posts
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    IanSt
    • #4
    • 10th Feb 18, 12:22 PM
    • #4
    • 10th Feb 18, 12:22 PM
    You'll find links at the top of the page that may help you in your quest.

    If you do decide to choose a high interest bank account then be careful to ensure that you meet the criteria needed to receive the interest as many of the accounts require you to have a suitable number of direct debits coming out of the account and a minimum amount being paid in each month.

    If you do not meet those criteria then you could find that you receive no interest in that month.

    The high interest bank accounts will also only pay interest upto a certain amount of money saved, so many people end up with multiples of these accounts to get the interest on bigger sums of money saved.
    • SnowWhite52
    • By SnowWhite52 13th Feb 18, 7:36 PM
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    SnowWhite52
    • #5
    • 13th Feb 18, 7:36 PM
    • #5
    • 13th Feb 18, 7:36 PM
    Hi and thanks very much for your replies. Perhaps I should have given more info - I won't be paying direct debits from the account, and I won't be putting large amounts in, probably only £100 a month, and the money could come out at any time, depending on if and when something comes up, but I'll definitely look at the high interest bank account, although I suspect I'm unlikely to meet the criteria.
    • xylophone
    • By xylophone 13th Feb 18, 7:48 PM
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    xylophone
    • #6
    • 13th Feb 18, 7:48 PM
    • #6
    • 13th Feb 18, 7:48 PM
    Maybe a TSB Plus current account - just cycle in/out the required £500 by FP from another account.
    • Kim_13
    • By Kim_13 13th Feb 18, 8:00 PM
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    Kim_13
    • #7
    • 13th Feb 18, 8:00 PM
    • #7
    • 13th Feb 18, 8:00 PM
    If you won't be paying direct debits from the account, your options on terms of current accounts are limited to the Nationwide FlexDirect (pays 5% on £2,500 for a year and 1% afterwards, so move the remaining money after the year.) It's a one time offer though, so you can't get it again if you've already had it; or the TSB Classic Plus (pays 3% on £1,500 with no set end date.)

    The Nationwide has a minimum monthly pay in of £1,000 and the TSB £500, but you can achieve these by moving money in from elsewhere by faster payment and then straight back out again.

    The majority of savings accounts won't allow money to be paid straight to an external current account, so you'll probably need to move the money out via a linked current account in your name and then send it onwards when a bill needs to be paid, or pay via the current account debit card.
    Last edited by Kim_13; 13-02-2018 at 8:04 PM.
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    • Eco Miser
    • By Eco Miser 14th Feb 18, 10:39 AM
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    Eco Miser
    • #8
    • 14th Feb 18, 10:39 AM
    • #8
    • 14th Feb 18, 10:39 AM
    Perhaps I should have given more info - I won't be paying direct debits from the account,
    Originally posted by SnowWhite52
    perhaps you are misunderstanding the point about direct debits. They don't have to be to pay your bills, they can be for quite small amounts, possibly into your own savings accounts, in order to meet one of the criteria for the accounts. See http://forums.moneysavingexpert.com/showthread.php?t=5734632
    although I suspect I'm unlikely to meet the criteria.
    Originally posted by SnowWhite52
    The criteria in question can usually be met provided you are aware of them eg, pay £xxx in each month (and then take it out again), pay so many direct debits (to your own savings accounts), go paperless statements and correspondence (tick the appropriate boxes in your profile).
    Eco Miser
    Saving money for well over half a century
    • aj23
    • By aj23 14th Feb 18, 12:04 PM
    • 396 Posts
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    aj23
    • #9
    • 14th Feb 18, 12:04 PM
    • #9
    • 14th Feb 18, 12:04 PM
    Maybe high interest bank accounts, and maybe high interest Regular Savings accounts. Either use those with easy access, or time the saver to mature just before the annual bill is due. This is what regular savers are intended for, though many use them just for general saving.
    Originally posted by Eco Miser
    But you can usually only make one withdrawal a year on Regular Savers penalty free, so you couldn't use that to pay monthly bills.
    • ValiantSon
    • By ValiantSon 14th Feb 18, 12:28 PM
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    ValiantSon
    But you can usually only make one withdrawal a year on Regular Savers penalty free, so you couldn't use that to pay monthly bills.
    Originally posted by aj23
    All depends on the regular saver in question. HSBC, First Direct and M&S don't allow any withdrawals. I agree, however, that generally a regular saver is unlikely to be suitable if the money is going to be accessed during a 12 month period. There are certain exceptions, such as Santander and Nationwide.
    • aj23
    • By aj23 15th Feb 18, 11:27 AM
    • 396 Posts
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    aj23
    All depends on the regular saver in question. HSBC, First Direct and M&S don't allow any withdrawals. I agree, however, that generally a regular saver is unlikely to be suitable if the money is going to be accessed during a 12 month period. There are certain exceptions, such as Santander and Nationwide.
    Originally posted by ValiantSon
    Yeah, but then it kind of defeats the point of regular saving if you're going to withdraw each month as you'll end up not really getting anything.
    • ValiantSon
    • By ValiantSon 15th Feb 18, 1:27 PM
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    ValiantSon
    Yeah, but then it kind of defeats the point of regular saving if you're going to withdraw each month as you'll end up not really getting anything.
    Originally posted by aj23
    I think the OP was talking about withdrawals for annual costs, like car insurance. Using a regular saver could, therefore, be useful.
    • aj23
    • By aj23 15th Feb 18, 2:50 PM
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    aj23
    I think the OP was talking about withdrawals for annual costs, like car insurance. Using a regular saver could, therefore, be useful.
    Originally posted by ValiantSon
    if he's going to use it to regularly save and close it end of term with the interest added, perhaps, but not as an easy access account. The balance will be running low most of the time so the interest you'd get would be negligible. Regular Savers work best if you are in a position to deposit the maximum for the whole term.
    • ValiantSon
    • By ValiantSon 15th Feb 18, 3:50 PM
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    ValiantSon
    if he's going to use it to regularly save and close it end of term with the interest added, perhaps, but not as an easy access account. The balance will be running low most of the time so the interest you'd get would be negligible. Regular Savers work best if you are in a position to deposit the maximum for the whole term.
    Originally posted by aj23
    Not necessarily. Assuming that an account allowing withdrawals is used and a couple of withdrawals are made at set points in the year, the significantly higher interest on a regular - compared to easy access - account could see benefit.
    • Eco Miser
    • By Eco Miser 15th Feb 18, 3:58 PM
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    Eco Miser
    But you can usually only make one withdrawal a year on Regular Savers penalty free, so you couldn't use that to pay monthly bills.
    Originally posted by aj23
    The OP was asking specifically about paying annual bills, so a correctly timed Regular saver would be perfect.
    Many regular savers are also easy access, so OK for unexpected bills.
    I agree they'd be no use for monthly bills, but if they're being paid out of monthly income, no saver account is much use.
    Eco Miser
    Saving money for well over half a century
    • aj23
    • By aj23 15th Feb 18, 6:35 PM
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    aj23
    Not necessarily. Assuming that an account allowing withdrawals is used and a couple of withdrawals are made at set points in the year, the significantly higher interest on a regular - compared to easy access - account could see benefit.
    Originally posted by ValiantSon
    Yes, but as I said, only if you max it out. Otherwise, there's no point.
    • aj23
    • By aj23 15th Feb 18, 6:39 PM
    • 396 Posts
    • 145 Thanks
    aj23
    The OP was asking specifically about paying annual bills, so a correctly timed Regular saver would be perfect.
    Many regular savers are also easy access, so OK for unexpected bills.
    I agree they'd be no use for monthly bills, but if they're being paid out of monthly income, no saver account is much use.
    Originally posted by Eco Miser
    Insurance and car tax, yes. But boiler problems don't necessarily happen just once a year.

    I think all, if not most, Regular Savers are easy access, some just put a restriction on the frequency of withdrawal, and it's usually once a year or bonus period etc. Your money isn't locked away from day one until the term ends.

    If you're timing it to coincide with when the bill needs paying, you don't need to wait until 12 months before to open it. You can open it anytime, and then it just matures at the end of the term. It will still be there (in real easy access) for when you need it.
    • ValiantSon
    • By ValiantSon 15th Feb 18, 8:36 PM
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    ValiantSon
    Yes, but as I said, only if you max it out. Otherwise, there's no point.
    Originally posted by aj23
    No, even if you draw the money before the 12 month term it can still, potentially, be a better option than an easy access account. To give an example, saving the full £250 p/m in Nationwide's regular saver, and then withdrawing the money at (for sake of argument) the end of the eighth month, would give you £37.02 interest. Compare this to putting the money in an easy access savings account at 1.35% (currently best), which would pay £10.09 in the same period. Even if you had the full £3000 in the easy access saver from the start, you would still only get £27 after eight months. The regular saver wins.

    I think all, if not most, Regular Savers are easy access, some just put a restriction on the frequency of withdrawal, and it's usually once a year or bonus period etc. Your money isn't locked away from day one until the term ends.
    Originally posted by aj23
    I've already said that Nationwide and Santander allow you to make withdrawals at any time, without penalty or restriction. HSBC, First Direct and M&S don't allow any withdrawals until the account matures. If you close the account early then they transfer the money to a normal savings account and treat it as if it has always been in that account, paying just 0.05% in HSBC and First Direct, and 0.1% in M&S.
    Last edited by ValiantSon; 15-02-2018 at 8:43 PM.
    • aj23
    • By aj23 16th Feb 18, 12:18 PM
    • 396 Posts
    • 145 Thanks
    aj23
    No, even if you draw the money before the 12 month term it can still, potentially, be a better option than an easy access account. To give an example, saving the full £250 p/m in Nationwide's regular saver, and then withdrawing the money at (for sake of argument) the end of the eighth month, would give you £37.02 interest. Compare this to putting the money in an easy access savings account at 1.35% (currently best), which would pay £10.09 in the same period. Even if you had the full £3000 in the easy access saver from the start, you would still only get £27 after eight months. The regular saver wins.



    I've already said that Nationwide and Santander allow you to make withdrawals at any time, without penalty or restriction. HSBC, First Direct and M&S don't allow any withdrawals until the account matures. If you close the account early then they transfer the money to a normal savings account and treat it as if it has always been in that account, paying just 0.05% in HSBC and First Direct, and 0.1% in M&S.
    Originally posted by ValiantSon
    Yeah, I didn't say it isn't potentially a better option, even if you withdraw before 12 months, if it lets you. You've highlighted many who don't allow withdrawal. That's why I said that that an easy access is better for if you need frequent access. Using a Regular Saver as an easy access account means you usually can't replace that months deposit, or the balance, subject to loss of interest, and perhaps penalties, and the term is usually 12 months anyway. That's why I said open one, max it out for 12 months, then it concerts to easy access at the end, so you have the RS interest and easy access after 12 months.

    Yeah Nationwide and Santander, that's essentially it. So unless you have the current account with either you can't open them anyway.

    We're are basically saying the same and agreeing, so I'm not sure why you're being combative.
    • ValiantSon
    • By ValiantSon 16th Feb 18, 12:43 PM
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    ValiantSon
    Yeah, I didn't say it isn't potentially a better option, even if you withdraw before 12 months, if it lets you. You've highlighted many who don't allow withdrawal. That's why I said that that an easy access is better for if you need frequent access. Using a Regular Saver as an easy access account means you usually can't replace that months deposit, or the balance, subject to loss of interest, and perhaps penalties, and the term is usually 12 months anyway. That's why I said open one, max it out for 12 months, then it concerts to easy access at the end, so you have the RS interest and easy access after 12 months.

    Yeah Nationwide and Santander, that's essentially it. So unless you have the current account with either you can't open them anyway.

    We're are basically saying the same and agreeing, so I'm not sure why you're being combative.
    Originally posted by aj23
    I'm not being combative, I have pointed out some flaws in what you said as, if someone acted on your statements, they might make a less good choice. The principle purpose of the forum is to share information and insight, so as to aid others in making a decision. Sometimes that means that you will be contradicted.

    You actually said that if a regular saver wasn't, "maxed out," then, "there [was] no point." This was factually incorrect. I posted to correct that by showing how a regular saver, used in the way described - withdrawing money before maturity, could lead to a better result than an easy access account. We aren't, "basically saying the same."

    It is not beyond the capability of someone of average intelligence to open a qualifying current account with either Santander, or Nationwide (or even both) to get access to their 5% regular savers. Your objection, therefore, makes no sense. These are not accounts only for those fortunate enough to happen to already hold current accounts with these two companies. Indeed, they are actually intended to attract new customers (as well as help to retain existing ones).
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