New contributor Frugalist is back to explain how he gamifies chasing the best regular saving accounts to make his cash work harder.
There’s something deeply satisfying to me about maximising my return on cash.
Not as an alternative to investing, of course. I’ve got bigger ambitions than simply fighting a slugging match against inflation with respect to my long-term goals.
But when you’re anticipating the risk of your boiler exploding in December, you’re wondering why your car’s clutch smells funny, or you’ve built up a giant stoozing hoard, cash savings accounts fit the bill.
Many people treat cash as afterthought. Whether through prudence or – let’s face it – laziness, they’ll put up with a less-than-1% interest rate from their bank.
But I won’t! Instead I’ve developed a hobby of finding the savings accounts with the juiciest rates.
If I’ve got cash I’ll always try to squeeze every drop of interest out of it.
I love big rates (and I cannot lie)
What gets me really giddy and excited are regular savings accounts.
The principal feature (/downside) of regular savers is that they invariably cap how much money you can put in each month.
Sometimes you can freely withdraw money whenever you like. More often your money is locked up for a time. They may pay a set rate of interest for a year before maturing, or the rate may be variable (which tends to mean downwards in the current climate…)
Either way the key is they usually won’t let you add money indefinitely. Instead you’ll earn interest for a year and then they’ll mature and you’re back to square one.
What’s the upside? Well in return for these limitations you can score some pretty attractive interest rates.
How about Virgin smashing the leaderboards with a 10% account in 2024? Or Saffron Building Society grabbing headlines with a 9% rate?
Kerpow!
When you clickthrough to read about these great rates though, you’ll typically find authors and readers in the comments alike saying the rates are too good to be true.
Geoff from Shrewsbury might claim: “I get more interest putting £40,000 in a normal easy access account.”
Mildred from Ramsbottom adds: “Erm, actually you’ll only get half the advertised rate.”
It’s almost impressive how much vitriol can be generated by something as seemingly uncontroversial as a regular savings account.
Regular savings accounts needn’t be confusing
I’m here to tell you that these accounts are far simpler than people suggest – and that you can do better than Mildred moans.
Hopefully I’ll provoke less fury in the Monevator comments for my troubles, too!
Let’s consider that Virgin account (though it’s no longer on the market as I write).
Virgin paid 10% (10.38% AER) on a maximum deposit of £250 per month for 12 months.
- By the sixth month, Mildred could have loaded it with £1,500 of contributions
- But the balance would only reach its maximum £3,000 in the final month
- So Mildred would get interest on the full £3,000 balance only in the twelfth month
To calculate what she’d earn over a year, a rough rule of thumb is to take the average balance (£1,500) and multiply that by the AER (10.38%), giving £155.70.
Getting a more precise number is a nightmare. It depends on the number of days elapsed when cash qualifies as interest-bearing in your account. Weekends and Bank Holidays aren’t just for frolicking – they are also for playing havoc with financial predictions and computer systems.
Anyway, if by comparison you put £250 into a 5% easy access savings account each month, then you would receive £82.50 in interest in a year.
That’s roughly half what you earned from Virgin’s 10% offering – just as you’d expect from a 5% account.
Limits are frustrating
Of course there are legions of people out there with tens or even hundreds of thousands in cash savings. Such people may remember – wistfully and rather selectively – heady 7% easy access savings interest rates being paid long ago by the likes of Icesave and Kaupthing. (Ah, great days!)
So when a flashy headline nowadays touts, say, a 9% interest rate, it’s excellent clickbait to attract these frustrated savers.
And it’s not surprising if on reading the restrictions in the T&Cs, some of these people then complain that regular savings accounts are pointless as you can only save £250 per month.
However just because you have £20,000 in total savings doesn’t mean you need to put the entire lot into one bank account.
Your savings pot is not monolithic
Separating your cash into pots instead and then maximising the interest rate on each can make a big difference to your total return, as I’ll demonstrate.
Do check those terms and conditions though. As I mentioned some regular savings accounts insist on no withdrawals until the term is up.
If you’re relying on a pot of cash for emergencies, you’ll need easy access. So check the clauses carefully.
The numbers feel unfair
If Mildred worked hard to put £3,000 in her 10.38% savings account, then she might have thought she could earmark a £311 interest payment for a new TV.
When she instead received roughly £150 over a year – and she doesn’t understand why – you can see how she’d feel diddled.
Now she repeats that same mantra for a decade: “They only pay half the rate”.
My issue is not that these people have these feelings – even if they are misinformed – but how their complaints get amplified and repeated, tarring regular savings accounts unfairly.
Institutions are partly to blame too for touting the juicy headline rate rather than the actual interest payments someone can expect for a year.
How I look at the maths
To be clear, ‘half the rate’ is actually no different mathematically to my ‘half the balance’ rule of thumb from earlier.
- £3,000 multiplied by half of 10.38% is £155.70.
If you didn’t fall asleep in your maths lessons, you will know that the order in which you multiply and divide numbers makes no difference to the result.
But psychologically, it’s totally misleading. The bank is not paying half the amount of interest owed. They are paying the full amount of interest on the average balance.
Not appreciating this can needlessly discourage people from opening such accounts, and hence from earning the most interest they could.
Making the best of regular savings accounts
Most of us function on regular income. We get paid monthly. We pay our bills monthly.
So if an account lets us save each month, that actually aligns with our finances.
If you can save a fresh £250 from your paycheque per month, then when you open a 10% regular saver you are maximising its benefits.
Whereas if you whinged about it ‘not really being 10%’ and instead stuck that £250 each month into a 5% easy access account, you would be missing out on double the interest.
But what if you’re in the camp of having a starting pot of cash? Say £3,000.
You don’t need to keep it under your mattress doing nothing as you slowly load it into your regular savings account. Instead:
- Put £3,000 in a 5% easy access account
- Each month, move £250 into the 10% regular savings account
- Earn 5% on £1,500 (£75)
- Earn 10% on £1,500 (£150) as well
- After a year withdraw your £225 in £5 notes and throw them into the air like Scrooge McDuck
That’s far better than the £150 you’d get using just one of the accounts. It’s an effective interest rate of 7.5%.
Testing this out with an example
Assume you amassed £10,000 to stash over the course of the past year. Let’s see what you might have earned in doing so.
I’ll use some recent examples of regular savers rather than only limiting myself to ones available right now.
That’s because the examples quickly get out-of-date anyway, and with regular savers it’s important to jump on opportunities when they arise. Products are withdrawn quickly if they prove too popular.
Consider for example the Monmouthshire Building Society. In August it launched two accounts allowing members to earn 7% on a whacking £1,500 per month! But it didn’t wait even a month before closing such accounts to new customers.
In the following table of recently available regular savings accounts, those in bold could still be opened as of October 2025:
| Provider | Rate (AER) | Monthly Max | Average Balance | Approx Interest |
| Virgin | 10.38% | £250 | £1,500 | £156 |
| Zopa | 7.10% | £300 | £1,800 | £128 |
| Co-Op | 7.00% | £300 | £1,800 | £126 |
| Nationwide BS | 6.50% | £200 | £1,200 | £78 |
| Progressive BS | 7.50% | £300 | £1,800 | £135 |
| RBS / Natwest | 5.50% | £150 | £900 | £50 |
| Principality (6 Month) | 7.50% | £200 | £600 | £45 |
| Saffron BS | 8.00% | £50 | £300 | £24 |
| Total | £1,750 | £9,900 | £741 |
Utilising all of these products to save money each month would have seen you earn £741 in total interest after 12 months.
In contrast, putting £9,900 into a standard savings account at 4.5% would have generated just £446.
Hence someone using the regular savings accounts would have generated £295 additional income (pre-tax), compared to simply taking out the best easy access account and leaving it there.
This is a little pessimistic though, as many of these regular savers are either fixed or are held at high rates despite base rate reductions. And that can’t be said for the market-leading easy access accounts.
Also I’ve not cherry-picked the best rates here. Swap those harder-to-get Monmouthshire accounts in for the RBS and Nationwide options, and your returns would be even higher.
Many happy returns
It’s easy to nitpick the scenario I’ve laid out. In practice it isn’t quite so simple.
You might be thinking, for instance, that a chunk of that £10,000 would have to wait for several months on the sidelines before it could be moved into a regular saving account. I’ll get to that in a minute!
As far as the maths is concerned though, it’s correct insofar as I’m assuming an average balance of £10,000 earning c. 7%. And from a ROCE ((Return on Capital Employed.)) perspective that’s around £700.
In my opinion this is where many articles get a bit stuck in the weeds. They focus on individual accounts and drip-feeding money across. It all sounds a faff.
However as I see it, if you’re looking at cash management as part of your wider portfolio, it’s more about how much you earn from maximising your return on your cash over many years. It’s a process, not a one-time thing.
In practical terms, you’ll look to open up these accounts as they are launched and when their rates pique your interest. As spare cash becomes available you’ll simply deploy it into the highest-paying accounts at your disposal, subject to their contribution limits.
If you’ve got, say, ten of these accounts then money will be cycling in and out of them periodically – such that you aren’t actually performing a mechanical drip-feed from an easy access to a regular saver.
You’re simply deploying cash (from whatever source) as it becomes available into your best-paying regular savers and recycling money as your accounts mature.
In this way cash from maturing accounts will only sit in easy access accounts for short periods of time, before being shuffled off into the next regular saver.
Still all this does raise another pushback…
Are regular savings accounts worth the effort?
Perhaps you think that £295 is not worth the hassle of maintaining all of these accounts.
You may also earn enough interest to pay tax on savings interest. That takes a further bite out of the possible gains.
Moreover with some building societies you must be an existing member to qualify for the best accounts. Even I wouldn’t recommend you speculatively join Saffron BS in the hopes of receiving £24 interest in some future year.
That said, joining the Monmouthshire BS a couple of years back definitely paid off for me now that I’ll be earning £630 from its exclusive 7% accounts.
And strategically choosing to start doing business with one or two key building societies might be worth the (digital) paperwork.
Nationwide is growing its user base consistently, so I’ll use its regular saver as an example of one that might be opened by Monevator readers.
With it paying 6.5% interest on £200 per month, we can quickly compare Nationwide’s regular saving to a 4.5% easy access alternative on an after-tax basis:
| Tax Rate | 4.5% Savings | 6.5% Savings | Difference |
| 0% | £54 | £78 | £24 |
| 20% | £43 | £62 | £19 |
| 40% | £32 | £47 | £14 |
| 45% | £30 | £43 | £13 |
Don’t forget, if you’re a 20% taxpayer earning less than £1,000 in interest per year or a 40% taxpayer earning less than £500 in interest per year, you would also sit in the first row.
By opening the regular savings account, you’ll benefit by roughly £24.
If the only requirement is a couple of minutes of tapping away on an Nationwide app you already have installed, that’s a pretty good return on your time IMHO.
But the big win comes when you have a portfolio of such accounts. This enables you to maximise the benefits of all and spread the maturities through the year.
You’ll also likely end up with a monster of a spreadsheet that you can show off to your friends and family.
Does it spark joy?
Everyone is different, so I can’t argue that regular savings accounts are for you.
Clearly if you’re a new saver with a few thousand pounds who has just started rolling your snowball, then these tactics are going to be more consequential than for grizzled Monevator veterans sitting on six- or seven-figure investment portfolios.
Even so, some people take real satisfaction out of extracting the most benefit from our cash for its own sake. I’ll let you guess whether that includes me. (Clue: I spend my free time writing about savings for Monevator!)
But I won’t stretch to the more extreme tactics employed by some, such as:
- Timing their payments based on which specific days qualify for interest at the receiving bank
- Opening fixed-rate regular savers speculatively in case rate drops make them more useful in future
- Finding loopholes to cram extra cash into their accounts
I think the law of diminishing returns kicks in here, given the limits of how much cash you can practically put away through even a portfolio of regular savings accounts.
But in more everyday ways, if you’re going to hold some cash then why not shoot for getting the best rate you can?
You’ll need to keep an eye on services that track rates. (Try MoneyFacts.) You’ll also need to get in before the masses of regular saver aficionados overwhelm new offerings and applications are closed, especially with the smaller buildings societies.
Happy stashing! Just please promise me that you’ll never say regular savers only pay half the advertised interest.
We both have a Royal Bank of Scotland Digital Regular Saver. It’s 5.5% AER, £150 PCM, and a £5k cap with a much lower rate for anything above this, but no time limit. You can also get any Debit Card payments rounded up with the excess going into the regular saver, but we rarely use our Debit Cards so don’t make use of this. Maybe handy for anyone using them for travel on a daily basis.
Most of our rainy day cash is in NS&I linkers (we maxed out the very last issue!) but these savers are handy as it’s instant access.
I still do this for all my cash that sits under the PSA as that’s where it gets the most interest. Unfortunately once tax gets involved it generally doesn’t work versus a Cash ISA. Currently, you can open a 4.5% ISA. If you’re a basic rate tax payer, and earn interest payments over the £1,000 PSA, then your effective rate drops 25%. All of a sudden those attractive 6.25%, 6.5% and 7% accounts drop to 5%, 5.2% and 5.6% for basic rate earners. And to a frustrating 3.77%, 3.91% and 4.22% for higher rates. Additional rates are further reduced
So definitely use it to maximise the tax free portion of your savings but beware the threshold. For some it may still be worth doing, for instance where ISAs are filled already. But it is an important caveat. The good thing is, it’s very easy to work out at the start of each tax year which accounts to open to maximise the tax free portion of savings.
One interesting thing I came across whilst researching this, and aligned to my theory that people get immensely confused about these accounts, was a set of numbers in that Which article I mentioned (https://www.which.co.uk/news/article/new-regular-savings-account-whats-the-catch-ayBAO4V9iVJp). They claim that the account would pay £326.65 interest rather than £162.40 if it compounded monthly rather than quarterly. I am still perplexed about how on earth they came up with that figure, and in any case it’s irrelevant when using an AER, which they are. If anyone can figure out what they’ve done, I’d love to hear about it.
Good read!
Been doing this for a while with a flexible ISA and 3 regular savers.
A really good calculator to show you the power of this can be found here too:
https://www.moneysavingexpert.com/savings/regular-savings-calculator/
Just select the drip feed option and fill in to see the difference!
Our current strategy as a non-tax paying couple (so we don’t pay tax on interest either) with a large lump sum is to dedicate 100k of the sum to regular savers, with 30 accounts each. We open six a month between us with the aim of being able to permanently cycle the cash after a year and to smooth out any interest-rate fluctuations. Madness really but potentially we’ll be earning around 6.5% (or equivalent level about the prevailing base rate) tax-free on 100k in perpetuity if it works out. Obviously the cash is stashed in the highest easy-access savings account before being drip fed in. We had originally opened loads in one go but there were too many cons to this (admin concentrated in one period, interest-rate risk).
I get this. The bit I haven’t yet worked out is how to (easily) make monthly contributions from cash savings to a regular saver. Currently, my pension income won’t support monthly contributions to a regular saver. Any suggestions?
Maybe I’m reading this wrong, but you seem to be comparing average balance in the regular saving account with a total in the ordinary savings account. To get the interest in the monthly savings account at the end of 12 months, would you not need double the total i.e. £19,800?
@Frugalist the Which article appears to be simply wrong, as monthly versus quarterly compounding wouldn’t make that much difference.
Note to editor: principal rather than principle.
Thanks for the article but as a 40% tax payer I think I’ll stick to the low coupon gilts loophole.
I’ve not commented before, but just wanted to say, nicely written piece. Thanks.
These savings accounts were highly useful to me at the start of my financial journey.
Now, they are useful in different ways.
Firstly, in helping my daughter to get value from her hard earned salary and secondly, my partner who is less interested in investments (which I manage for her) and more interested in maximizing value of cash accounts.
Thank you for the well written article @Frugalist.
Ahhh Icesave. Yes. When the computers went down at work once, shortly after the GFC, a colleague dryly remarked whether this was what it was like when savers logged into their Icesave accounts in October 2008 to find no money there?
Use the low coupon gilt ‘work around’, but still have gotten all the bank Regular Savers paying >6% (my threshold, as a HRT), and also the NWBS one, but have not yet tried the offerings of the smaller Building Societies.
Live in the country, but work in a city, so hoping, if it’s not possible to easily open online, that it will be so in a branch.
If anyone reading has practical experience of opening Regular Savers with the smaller Building Societies it would be interesting to hear how difficult/time consuming account opening was, and any tips to speed it up. Practical logistics is everything in these things IMHO.
I used to do this when my income was v low. But when income is v high, not worth the effort. Only winner is the Treasury. Takes too much time to find rates, open accounts, compile year end figures, etc, just to end up in the same net position as doing very little.
But if I was retired or a student, I would be all over this.
Interesting article – it would be nice if one of the websites like MSE or BeCleverWithYourCash had some sort of tool where you could load in your recent account history and an amount you wanted to maximise interest and account switching returns in.
Then once a month it would suggest the nect action based on the accounts you currently have and current deals.
@Andy #11
> But if I was retired or a student, I would be all over this.
I am retired. And I still CBA, life is too short. But props to those who are up for it. Once upon a time that would have been me. But Thoreau did have a point that A man is rich in proportion to the number of things he can afford to let alone. This looks like make-work to me, and I am additionally reluctant to give my KYC details to more organisations that can spaff them to hackers and make life difficult for me.
Chacun à son goût and Frugalist at least deconstructs the reality behind the inflated headline rates.
@gadgetmind Those debit card payments were one example I had in mind when I mentioned not using loopholes to cram more money in! I know some people were making £1.01 payments to credit cards to trigger the double-ups (now five-ups I believe!)
@PrudentSaver Absolutely, if you have cash ISA space that’s a great option. For non-taxpayers or people who’ve filled the ISA allowance with investments it’s an additional option to maximise returns.
@Brian This is why we added the section “Many happy returns”. If you started out with £10k on day 1, and were making a comparison purely over the first 12 month period after opening 8 regular savers on the first day, that would be the case. But in reality you would build up to this position over time, and then each month you would be cycling the money between different regular saver accounts – much as @PinkMoneyPanther describes! – so once you’ve got £10,000 in those accounts, maturing regular savers fund the new ones and you are just shuffling that money between the accounts. For me, if one month I don’t have a spare £200, I simply don’t fund the lowest rate regular saver – I haven’t funded the RBS / Natwest 5.5% accounts in months. Hopefully that makes sense!
@Andy and @Ermine – I totally agree. For me, it’s something I can do quietly on my phone or laptop in the evening once the kids are in bed and I’m winding down, and I do get some satisfaction from it. I wouldn’t be sneaking home from work early in order to open one! But it is very much personal preference, especially if you’re making enough from your pension, investments etc that it’s not moving the needle.
@Delta Hedge Things really have come on in the past few years. Those Monmouthshire accounts were launched to celebrate the launch of their first app(!). So for the vast majority, it’s a case of applying on the website or app, doing a quick driving licence / passport scan on your phone and for some a selfie for verification. Maybe takes 5 minutes or so. Personally I skip ones that require physically going to the branch (even if I have one nearby) or where verification hits a snag, but those are extremely rare these days anyway. For the ones that have a habit of releasing strong accounts (like Yorkshire BS, Saffron BS, Coventry BS, Monmouthshire BS and Progressive BS) I had opened basic savings accounts previously and then when the accounts came up (inc ones for existing members only) they were trivial to open.
Agree with @ermine – used to do regular savers when I had a rather sad life and nothing better to do with it to gain just a pittance, often a few quid here or there, over and above the interest paid on a combination of fixed/easy access accounts anyway (and after taxed on it as well). Don’t get me wrong I do look for the best paying savings accounts for my cash but just not those where you are made to work/churn all the time investing very small amounts only and for very small returns. Seems a stupid waste of time when your investment portfolio is making it large, at present anyway – just not worth the hassle for a lot of us.
I don’t figure this as being lazy – it’s rather just being sensible and the extra gain versus the time/effort in opening them all (including some banks now insisting on wasting your time with having to do ID videos on smartphone rather than them checking electronically as they used to do) and then transferring monthly deposits over to them all (or setting up standing orders for the year as I used to). Then having to account for all these regular savers at the year end on your tax return is just not worth the damned effort involved – maybe if you’re new to investing and don’t have that much in assets but otherwise not a good use of your time and just a complete faff for next to nothing, IMO.
I would rather use my life to do other things really but if I’m going to spend time on such things, I would do so for more potential benefit in the scheme of things. I do have a fair number of brokers (not just 2 or 3) since I think there is more value in seeking out some with cheaper fees (if not too risky) where possible and having more to spread risk amongst because if anything is gonna go bad with them – we’ll really be the last to know until it’s too late – like with the banks including some of mine in the GFC. I’m glad I didn’t have all my eggs in just one/two baskets anyhow.
I’ve heard many on here say having more than 2/3 brokers is a waste of time/too much effort but it depends how much you have to lose by stashing vast amounts with a single broker or two, then potentially only getting 85K back. Yes I do know about the CASS rules and segregated accounts (where your hard earned is actually pooled with others it says in their T’s & C’s and you may not get back all of your money it says). I would also not ever trust a system whereby the brokers are themselves entrusted to largely administer it correctly, with only minor outside audit now and then. They probably will administer it by the book (for now whilst things are going well/they are in profit) until the shit hits the fan, they are in financial trouble and then they won’t and then likely your assets will be those that “go missing.”
Nah, no self administered system is for me – just leaving the fox in charge of the hen house scenario again, IMO …………..and that’s always worked well in the past hasn’t it? Do we not ever learn anything?
Like some moan, I also don’t think it’s hardly any more effort/time in having quite a few brokers rather than only a couple (I should know I have them) and I can’t see what they carp on about. They say it’s impractical, not worth the time or effort but can never say why it’s so much effort – I’d be fascinated to know what all this work involved actually is comprised of – even though they often spout it nobody ever seems to know.
In fact it’s much more of an effort/waste of time, combined with very little benefit, in messing around with a merry go round of regular savings accounts as per this article. Having more brokers involves what actually when it comes down to it? Mainly just logging in now and again to value investments, sell/buy the odd thing, download the odd statement/tax certificate if you need one (although some brokers will even send these in post such as Fidelity/HL/Barclays/HSBC so you don’t even have to do this). Having more brokers is really no more difficult for tax purposes either (with GIA accounts) and don’t tell me you need to be king of spreadsheets either with umpteen of them tracking everything – unnecessary and largely a major waste of time for most people.
This is fair enough (as noted in the article) but it’s also the difficulty of writing for a wide audience. (Or at least aspiring not to only write for a few hundred pre/post retirees managing a seven-figure portfolio in drawdown 😉 ).
If you’re in your 20s and you’ve only a few thousand pounds to your name, perhaps still building your emergency fund or a house deposit, then make a few extra hundred quid a year is very worthwhile. Besides the savings return it might represent a meaningful percentage of your post-tax salary, especially your disposable income.
Absolutely the impact goes away with big portfolios since it doesn’t scale. (Although it’s worth remembering it’s a guaranteed return of course.)
@TI
Yes I do appreciate what you say and agree with you – as a investment writer you do have to cover all bases for all readers – I did say that it was not worth the effort except “maybe if you’re new to investing and don’t have that much in assets” but agree my post was particularly one sided (it’s from the perspective of a middle aged (50s) grumpy git with a 7f portfolio as you alluded to).
I appreciate that younger investors need to start somewhere and need to grab every penny they can even from these regular savers. I would encourage those to do so – I did when younger, as I mentioned, even if I wouldn’t consider it worth it now for myself or more seasoned investors.
Cash savings though always have a place, I myself currently have likely more than I should in fixed/easy access cash savings (currently well over 100k however unwise that is – for a few reasons) and I still do go for top rates in these and swap easy access out if rates fall by too much and there are better that are worth the effort of churning, although I only do it when I assess it’s worth that effort. It’s like the bank account switch bribes and investment account transfer bribes – I’ve done them in the past but not worth the bother now unless I was going to transfer anyway then I might as well grab it for a free lunch but for others building their stash they may just do it solely for the free cash. As I said small amounts don’t really mean much to you anymore when your portfolio is of a certain size – compounding is an amazing thing – funnily enough I actually don’t mind logging into all my accounts and getting a shock every few weeks by how much they’ve escalated lately – definitely doesn’t seem like a chore! Won’t be looking when the crash comes though.
I think though what got me grouchy was sort of advocating this constant churning and the effort vs the gains when I’ve seen a lot of posts saying it’s too much of a bother/time consuming/not practical or whatever, to spread your investments between a few brokers sometimes not only saving a large wedge p.a. (mainly on those % fee accounts) but also diversifying risk between brokers. It may be rare but rare events do happen and there have been many scandals down the years and I think it’s best not left to luck. I’m not arguing this with you as I think I’ve seen you write that you do have a few accounts and like to spread the risk – tending to slight paranoia, like myself!
If the effort of constantly churning regular saver accounts is worth the effort then, especially for those with larger pots, it should be worth what I would argue is a lot less effort to protect those – where much larger amounts could potentially be lost. Nobody has ever persuaded me or even given a reason why it is so much effort to have more brokers than just 2 (or even 3) many have, sometimes containing quite high value portfolios – some I’ve heard say have 500 or 750k with one broker arguing it’s impractical and time consuming to have more but they can never actually say why it is. Opening another account doesn’t take long, logging in online, as I do, doesn’t take hardly any time and downloading statements doesn’t – I spend more time sorting my savings accounts in reality and a lot more spent on managing a residential investment property I have, so where actually is all the extra time/effort spent in having more brokers? I admit tax is a pain on GIA accounts but the time/effort spent on tax returns is hardly increased by much at all in having more brokers – it just means a few tax statements rather than just one/two but adding a few divis together from a few statements is not really what you call a “time consuming” exercise or a major hassle – I can’t quite figure it but each to their own I suppose.
Nor do I really buy the argument that more brokers means more chance of one failing and so don’t do it and just stick with minimal. Whilst it is true statistically of course, if you had just 600k invested/1 broker then you stand to lose 515k if the very worst happens whereas have 3 decent/well established reputable brokers (split evenly) you would stand to lose 115k. You wouldn’t want either of these but I know my preference – even if it’s slightly increasing the chances via more brokers. Neither would I go way above the FSCS anyhow if invested with some of these newer type digital platforms (many that haven’t as yet made a profit based on their Companies House accounts).
It was just these thoughts I had when I read this article.
(i) We like the Lloyds Club monthly saver: up to £400 pm and the 6.25% is fixed. We plan to open a joint account though if we’d more spare income it might be handier to go for one account each, the second opened six months after the first. But with a joint account then, as I understand it, when I snuff it my widow will have access to the cash without waiting for probate. Could be handy.
(ii) Also consider the Nationwide account – it’s flexible. You can take money out and then replace it again as long as you do that in the same month. Moreover it may be the savings account that qualifies you for a “Fairer Deal” bung of £100 p.a. Worth the gamble: for some people that might be a way of replacing the Winter Fuel Allowance though so far it has paid out in spring/early summer rather than autumn/early winter.
(iii) But neither of us wants to do any sort of banking on a mobile phone.
I look upon these larks as being like stoozing – a way of gearing the return on cash. “Not on much cash” you may say. But it may be a reasonably neat way to use part of your Savings Allowance against income tax. If you shared that between, say, regular savers and low coupon index-linked gilts you might feel pretty happy about the combo. Add some gold sovs and you may feel pleased with your diversification of modest sums. Probably depends on how rich you are.
By the by, does anyone know a regular saver that feeds itself by direct debit rather than standing order?
At some point in one’s life the equation shifts from being willing to do more admin to maximise the pennies to being prepared to leave money on the table for less hassle.
I absolutely cannot stand admin, and the thought of more emails and/or letters coming in from a multitude of current and historical accounts gives me the fear just thinking about it.
Good luck to the OP. There have been times in my life where every penny counted, and I would have been all over these offers.
I’d sacrifice the gain made from doing this in order to not have to look for all the savings account statements at the end of the year in order to fill in the tax return. When is AI going to do tax stuff reliably? Find receipts, fill in the self assessment form and, most importantly, be responsible for the accuracy of the information in the tax return? That’ll be the day I finally accept that AI has a genuine use for me.
@Frugalist
I think the point they were meant to be making is that most people would think they earn interest on a balance of £3k, but that in fact you get less as the average balance is just £1.5k. However it looks like the author doesn’t understand the topic properly and has gotten confused by thinking it is the frequency with which interest is paid that affects the overall return. I expect they were given some pointers on how to write the article but but ended up getting confused.
I think this a good article. I have a 7 figure portfolio (so what) and I still think it’s useful to write about how to deploy cash irrespective of a bit of admin; it’s all online anyway now fcs. The other point I would make is, nobody knows what the future holds. You may be rich today and on your uppers tomorrow, so stay humble.
I suppose it’s not in the banks interest to do it, but if these accounts were available via something like HL active savings, or Raisin, then it would be way more attractive.
Haven’t seen those Icelandic banks mentioned for a while, I know I had quite a bit (at the time for me) in one, fortunately I got it all back eventually.
Related question, doing a bank switch for a bonus cash payment, all banks have T&Cs saying you only qualify if you haven’t done a similar switch recently
For example, First Direct says you only qualify for a switch payment if you haven’t previously done it after 2020
Now, my question is, if I switch a joint account in both mine and my wifes name, is this considered a different entity to the two *individual* accounts I switched previously? And therefore the switch does qualify for the payment..
Not sure if I’ve explained that very well?
In other words, can you do a joint account switch and not fall foul of the T&Cs even if you have both separately done a recent switch with same bank but in your own, individual names?
Ideally interested in hearing from someone whos done this and succeeded/failed as opposed to someone who thinks they know how it works