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  • FIRST POST
    • Rowbo
    • By Rowbo 10th May 18, 1:25 PM
    • 40Posts
    • 2Thanks
    Rowbo
    Where do you 'put' your emergency fund?
    • #1
    • 10th May 18, 1:25 PM
    Where do you 'put' your emergency fund? 10th May 18 at 1:25 PM
    We have almost saved 6 months outgoings as an emergency fund but i am not sure where it should go. Its in an old virgin isa at the moment with an interest rate of 0.51%. It will total 12000 once we are done (another few months).

    I've seen current accounts where you can get good rates but it would involve splitting it up and drip feeding it in. It would have to be well worth all that hassle to do that. I also dont want to be moving bits around too often - although moving the lump sum once a year would be fine if needed.

    Any advice? Where are your emergency funds?

    Thank you.
Page 1
    • El Torro
    • By El Torro 10th May 18, 1:32 PM
    • 287 Posts
    • 267 Thanks
    El Torro
    • #2
    • 10th May 18, 1:32 PM
    • #2
    • 10th May 18, 1:32 PM
    Most of my emergency fund is in current accounts. Yes, this involves maximum balances, standing orders and sometimes direct debits. I think the interest is worth the time it takes to set up though. It doesn't take a lot of management from month to month.


    I'm currently saving up for something specific, that extra cash is going in Premium Bonds. I'll spend my Premium Bonds before I spend the cash in my current accounts.
    • Anonymous101
    • By Anonymous101 10th May 18, 1:33 PM
    • 1,086 Posts
    • 471 Thanks
    Anonymous101
    • #3
    • 10th May 18, 1:33 PM
    • #3
    • 10th May 18, 1:33 PM
    There's various accounts where you can get between 3-5% on a couple of thousand pounds right away. Nationwide flex direct for example is 5% on 2,500. I would list out these accounts which can easily be found on the main MSE page in order of interest rates until I had distributed the 12k.
    Then look to open the regular saver type accounts paying a higher interest rates to better your position.

    Getting 0.51% interest on 12k is ridiculously poor, you're losing 350-500 a year in interest!
    • Rowbo
    • By Rowbo 10th May 18, 1:36 PM
    • 40 Posts
    • 2 Thanks
    Rowbo
    • #4
    • 10th May 18, 1:36 PM
    • #4
    • 10th May 18, 1:36 PM
    There's various accounts where you can get between 3-5% on a couple of thousand pounds right away. Nationwide flex direct for example is 5% on 2,500. I would list out these accounts which can easily be found on the main MSE page in order of interest rates until I had distributed the 12k.
    Then look to open the regular saver type accounts paying a higher interest rates to better your position.

    Getting 0.51% interest on 12k is ridiculously poor, you're losing 350-500 a year in interest!
    Originally posted by Anonymous101
    wow! When you put it in monetary terms it makes a bit of effort seem worth it! Thank you, i will start listing!
    • Rowbo
    • By Rowbo 10th May 18, 1:37 PM
    • 40 Posts
    • 2 Thanks
    Rowbo
    • #5
    • 10th May 18, 1:37 PM
    • #5
    • 10th May 18, 1:37 PM
    Most of my emergency fund is in current accounts. Yes, this involves maximum balances, standing orders and sometimes direct debits. I think the interest is worth the time it takes to set up though. It doesn't take a lot of management from month to month.


    I'm currently saving up for something specific, that extra cash is going in Premium Bonds. I'll spend my Premium Bonds before I spend the cash in my current accounts.
    Originally posted by El Torro
    I had considered premium bonds. That small chance of the big win is sometimes quite appealing. Thank you. I guess im off to research current accounts.
    • Fatbritabroad
    • By Fatbritabroad 10th May 18, 1:54 PM
    • 353 Posts
    • 191 Thanks
    Fatbritabroad
    • #6
    • 10th May 18, 1:54 PM
    • #6
    • 10th May 18, 1:54 PM
    Ive got this dilemma atm. My emergency fund is in tsb, nationwide and santander regular savers and 123 account as ive had nationwide accounts total about 14000.ivr got another 10k in p2p and the rest in stocks and shares. Im saving up to do our kitchen and replace 2 second hand cars so will probably need about another 30k but don't want the opportunity cost of holding that much cash without getting decent interest. Atm I'm just slowly building cash as I'm too tight to spend that much money!
    • Prism
    • By Prism 10th May 18, 2:01 PM
    • 336 Posts
    • 253 Thanks
    Prism
    • #7
    • 10th May 18, 2:01 PM
    • #7
    • 10th May 18, 2:01 PM
    I keep mine in my company so I don't have to pay tax on it until I absolutely need it. The downside is that my company bank account pays 0% interest and I pay the bank about 40 per year to keep it (and more to use it)
    • xylophone
    • By xylophone 10th May 18, 2:17 PM
    • 25,372 Posts
    • 14,968 Thanks
    xylophone
    • #8
    • 10th May 18, 2:17 PM
    • #8
    • 10th May 18, 2:17 PM
    The OP says "we" - assuming that they have never had Nationwide Flexdirect accounts, they could open a sole each and a joint and earn 5% on a total of 7500 for a year.

    They could open a sole each and joint TSB Plus account and earn 5% on 4500.

    Easy to arrange the necessary monthly pay ins TSB/NW and back again with same day SOs.

    Once the Flexdirect year ends (provided that they have the necessary DDs), they might see what is then on offer from Tesco Bank?
    • bostonerimus
    • By bostonerimus 10th May 18, 2:20 PM
    • 1,826 Posts
    • 1,171 Thanks
    bostonerimus
    • #9
    • 10th May 18, 2:20 PM
    • #9
    • 10th May 18, 2:20 PM
    Keep the majority of your emergency fund in whatever easy access account gives you the most interest.

    I keep a few months cash in my current account and the rest is in an account that gives 2.5% interest, but would take a couple of days to get at the money.
    Misanthrope in search of similar for mutual loathing
    • Zorillo
    • By Zorillo 10th May 18, 2:38 PM
    • 160 Posts
    • 86 Thanks
    Zorillo
    Mine is with NS&I earning 2.2% on a three year deal, with access should I need it at a loss of 90 days interest on the amount withdrawn. This helps to prevent it being frittered away.
    • Plus
    • By Plus 10th May 18, 3:05 PM
    • 356 Posts
    • 279 Thanks
    Plus
    A lot of regular saver accounts allow access - either penalty free or just dropping the interest down to a lower rate. The main ones that don't allow access are the HSBC group ones (HSBC, M&S, First Direct).
    • jimjames
    • By jimjames 10th May 18, 5:26 PM
    • 12,588 Posts
    • 11,233 Thanks
    jimjames

    I've seen current accounts where you can get good rates but it would involve splitting it up and drip feeding it in. It would have to be well worth all that hassle to do that.
    Originally posted by Rowbo
    Most current accounts don't require you to drip feed in. 4 Tesco accounts would give you 3% on the whole balance.

    That's 360 per year compared to 61 you get now. Use 5% accounts for some of it and you'll increase it even more
    Remember the saying: if it looks too good to be true it almost certainly is.
    • aroominyork
    • By aroominyork 10th May 18, 7:28 PM
    • 450 Posts
    • 133 Thanks
    aroominyork
    Mine is with NS&I earning 2.2% on a three year deal, with access should I need it at a loss of 90 days interest on the amount withdrawn. This helps to prevent it being frittered away.
    Originally posted by Zorillo
    I like this. If it's truly emergency only but needs to be accessible this is a very elegant solution.
    • Katiehound
    • By Katiehound 10th May 18, 8:39 PM
    • 4,401 Posts
    • 38,788 Thanks
    Katiehound
    If there are two of you , you might consider switching a current account to Nationwide FlexDirect with the' refer a friend scheme'. 100 each for yourself and the referrer (see referrer's board) You need to check the t&cs for a switch. If that's what you want to do open an extra basic 'donor' account to switch. You can then repeat the process between spouses.So, not only 5% interest but a little cash boost too....

    For Tesco current a/cs now I think you need 2 or even 3 DDs
    Being polite and pleasant doesn't cost anything!
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    2018 Wombling : Entrant 8 ..2280 cc+.2205mm (2.20.5) + RK 5.21= 30.25.5
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