Comparing Santander to other Savings Accounts

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DC.
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Comparing Santander to other Savings Accounts

Postby DC. » Sun Feb 14, 2016 5:37 am

I've been tasked with helping someone invest money, nothing too adventurous, I'm not a financial adviser.
I helped them open some current accounts to use as savings.

We have opened 2 TSB 5%, Lloyds 4%, Tesco, HBOS 3%.
I was pondering about Santander, with them charging a fee, I don't like fees, however if they are the best next option, then why not.

So I created a spreadsheet, calculating various things, one thing was the equivalent % after the £5 fee.
I found a threshold of £4150 to give an equivalent 1.55% in the 123 current account, and the best instant access to be the same. Can anyone verify or disagree with my calculation?

There will be no DDs on the account for cashback purposes, as they have a joint 1 that does that already.
I looked at the MSE guide, but it says at £8600 it beats everything, below that Lloyds wins, but of course that is already in use in this case.

The 1.55% instant access is one by RCI. Everything else is either fixed term, or says it's instant access, but is limited to 4 withdrawals, or is limited to £3000 etc, or you have to live near the bank.

cashback
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Re: Comparing Santander to other Savings Accounts

Postby cashback » Sun Feb 14, 2016 5:12 pm

There are a number of regular savers on the market with decent interest rates. You can use these to drip feed from the lowest interest paying account.

Theoretically you're locked in for a year on them but this would only be a portion of the overall fund by the sounds of it.

Stocks and shares ISA (or whatever they're now called), invested in decent-yielding shares like Glaxo Smithkline, BP, National grid etc. Downside risk to this, being stocks and shares.

Other options are peer to peer (P2P) lending but ensure you spread your risk out.

I like precious metals myself but there's a downside risk to this play too.

DC.
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Re: Comparing Santander to other Savings Accounts

Postby DC. » Sun Feb 14, 2016 6:10 pm

The person in question is investing the lump sum cash part of a pension, that was discontinued by the company.
I have looked at regular savers, running alongside the Santander account, but the santander account will at some point get below £3000, making it negative, but not all the time.

I was hoping someone would be able to verify my calc above.
I'm happy to send a copy of the spreadsheet if that helps.

cashback
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Re: Comparing Santander to other Savings Accounts

Postby cashback » Sun Feb 14, 2016 6:27 pm

Probably best for someone who has a Santander account to comment on your calcs.

The threshold will alter from April anyway, when all tax is paid gross.

Was tax factored into your calcs?

DC.
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Re: Comparing Santander to other Savings Accounts

Postby DC. » Sun Feb 14, 2016 8:14 pm

I was looking at tax, when looking at just the interest each month.
When I decided to look at equivalent interest after the fee, I took out the calc for tax, with me not thinking it being too relevant, April is only getting closer. However I've just done a quick calc using the remainder invested in santander, and it puts them a few pound over the savings allowance threshold. (Any regular savers are going to put them further over, and they will then be taxed extra on their PAYE earnings.)

I have only been looking at Instant access vs Santander, with drip feeding into regular savers from either.
The Regular savers also depend on another round of opening current accounts (HSBC Stable)

The calc I was after verification for is £4150/100*3 to give the interest earned yearly, then -£60 for the fee, then divided by $4150 and multiplied by 100 to give 1.55%, therefore as long as the santander account is over £4150, it is making the most money, compared to the current best instant access.

They may decide that going the regular saver route is too much hassle, so I could look at fixed term savings, but it will need to beat 2.53% i believe. Although at that point they will be £30 over the £1000 limit, even though the £60 fee takes them £30 below, the tax man wont recognise that, so I'll have to look at tax free savings for them.

Thanks

YorkshireBoy
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Re: Comparing Santander to other Savings Accounts

Postby YorkshireBoy » Mon Feb 15, 2016 2:03 am

You can have 3 x BoS Vantage, and 2 x Tesco, so that's another £13K they can 'lose' before having to resort to Santander.

Additionally, there's Nationwide at 5% for a year.

Nationwide and TSB have 5% regular savers paying 5% on a total of £750 a month. Lloyds have a regular saver paying 4% on £400 a month. So that's £1,150 a month that can be drip-fed from the 3% accounts.

All of which means Santander might not even be necessary?

Finally, is there just one of them or are joint accounts a possibility? Because that ramps the return up somewhat!

planteria
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Re: Comparing Santander to other Savings Accounts

Postby planteria » Mon Feb 15, 2016 9:30 am

good advice above..
not all of the Regular Savers lock the money away, bear in mind
HSBC-stable accounts cannot be accessed, but TSB and Nationwide ones can, i think.. anyone confirm?

DC.
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Re: Comparing Santander to other Savings Accounts

Postby DC. » Tue Feb 16, 2016 10:12 pm

Cool, I wasn't aware that you could have 3 BoS Vantage or 2 Tesco.

Re the above accounts, do you cycle from 1 BoS or Tesco to the next, like you can with tsb and halifax, for purposes of funding the accounts?

YorkshireBoy
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Re: Comparing Santander to other Savings Accounts

Postby YorkshireBoy » Wed Feb 17, 2016 1:05 am

BoS can be internally funded.

Tesco doesn't have a monthly funding requirement, since they withdrew it last year. I've left my cross-funding SOs in place though, just so there's some 'activity' on the account (as otherwise, because I run at £2,950ish, there would only be the one interest transaction each month!).

Sarah
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Re: Comparing Santander to other Savings Accounts

Postby Sarah » Wed Feb 17, 2016 11:24 pm

Also getting down to even smaller numbers, there's still 2% on £3000 at Yorkshire Bank and £150 for switching:
http://www.ybonline.co.uk/personal/curr ... ts/direct/


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