Savings account to pay regular bills

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SnowWhite52
SnowWhite52 Posts: 2 Newbie
in Savings & investments
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
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  • MallyGirl
    MallyGirl Posts: 6,619 Senior Ambassador
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    Probably a high interest bank account
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  • Eco_Miser
    Eco_Miser Posts: 4,708 Forumite
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    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
    IanSt Posts: 366 Forumite
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    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
    SnowWhite52 Posts: 2 Newbie
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    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
    xylophone Posts: 44,413 Forumite
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    Maybe a TSB Plus current account - just cycle in/out the required £500 by FP from another account.
  • Kim_13
    Kim_13 Posts: 2,432 Forumite
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    edited 13 February 2018 at 9:04PM
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    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.
  • Eco_Miser
    Eco_Miser Posts: 4,708 Forumite
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    SnowWhite52 wrote: »
    Perhaps I should have given more info - I won't be paying direct debits from the account,
    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
    SnowWhite52 wrote: »
    although I suspect I'm unlikely to meet the criteria.
    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_2
    aj23_2 Posts: 1,155 Forumite
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    Eco_Miser wrote: »
    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.

    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
    ValiantSon Posts: 2,586 Forumite
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    aj23 wrote: »
    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.

    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_2
    aj23_2 Posts: 1,155 Forumite
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    ValiantSon wrote: »
    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.

    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.
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