You are here: Home - Saving & Banking - News -

Savers could use current accounts to double returns

0
Written by:
14/10/2013
Savers who do not have an old account paying a competitive interest rate could consider using a current account for savings.

People who want to build a nest egg could be better off leaving money in their bank current account as many pay higher rates than their savings counterparts, the Mail on Sunday reports.

Current accounts pay an average of 1.19% credit interest, according to Moneyfacts – more than double the average instant-access account.

This is because banks are keen to attract customers to their current accounts so they can sell more lucrative products such as credit cards, insurance or investments. This is harder to do on savings accounts.

Nationwide’s FlexDirect current account pays 5% on balances up to £2,500, but you would have to pay in £1,000 a month.

Bank of Scotland and Lloyds’ Classic accounts with Vantage – an option for account holders who pay in at least £1,000 each month – pay tiered interest of 1.5% from £1 to £999, 2% from £1,000 to £2,999 and 3% from £3,000 to £5,000.

Someone who keeps £5,000 of savings in one of these accounts for 12 months would earn £150 before tax.

Customers with bigger sums to invest may be better off with Santander’s 123 account, paying 3% on balances between £3,000 and £20,000.

Tag Box

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

ISAs: your back-to-basics guide for 2018/19

Here’s everything you need to know to make the most of your unused ISA allowance ahead of the 5 April deadli...

A guide to Sharia savings accounts

A number of Sharia savings products have upped their game in recent months, beating more familiar competitors ...

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

  • RT @STEPSociety: UK Ministry of Justice abandons plan to increase EW probate fees, described by STEP’s Emily Deane TEP as a stealth tax on…
  • RT @STEPSociety: UK Ministry of Justice abandons plan to increase EW probate fees, described by STEP’s Emily Deane TEP as a stealth tax on…
  • RT @STEPSociety: UK Ministry of Justice abandons plan to increase EW probate fees, described by STEP’s Emily Deane TEP as a stealth tax on…

Read previous post:
US default could cause ‘worldwide recession’

Christine Lagarde, head of the International Monetary Fund, has sparked fears over the impact of a US default, warning it...

Close