50K - Bank Account Savings Options

[PD9]

Someone close to me wishes to take 50k out of their bank account after the funds were released from a 3 year ISA with LloydsTSB (now TSB). The final amount was poor for the amount and period of time the money was 'locked away'.

Given the savings market is so bad at the moment; What is the best way to divide this money up? Keep the 50k and store in a savings account? Or pop 25k away in 2 different accounts with 2 banks? I've heard good things about Santander.

I thought this would be the best place to ask as we have specialists on PH who come into contact with these sort of queries in their professional working life.

All feedback and ideas are appreciated.

[petemurphy]

30k in premium bonds? least its fun

[Elderly]

PD9 said:

Someone close to me wishes to take 50k out of their bank account.............. . pop 25k away in 2 different accounts with 2 banks? I've heard good things about Santander.

I've personally had no issues with Santander and @ 3% on balances up to £20K
nothing comes close.
You can have two accounts so that takes care of £40K.

You do need to set up two direct debits into each account (that's easy)
and fund each account with £500 per month.
That's easy too, just set up a third account with another institution
and arrange the £500s to go in (and out again) by standing order.
Once you've organised that - just sit back and do nothing.


Has the person close to you used up their ISA allowance for this year?

[PD9]

Elderly said:

I've personally had no issues with Santander and @ 3% on balances up to £20K
nothing comes close.
You can have two accounts so that takes care of £40K.

You do need to set up two direct debits into each account (that's easy)
and fund each account with £500 per month.
That's easy too, just set up a third account with another institution
and arrange the £500s to go in (and out again) by standing order.
Once you've organised that - just sit back and do nothing.


Has the person close to you used up their ISA allowance for this year?

Excellent input Elderly. I was having a read at the Santander Current Account on MoneySavingExpert.

So we could set up 2 accounts at 20K with Santander, setting up a third with XYZ Bank. Arrange the £500.00 to come out of both accounts into the 'mule' account and standing order it back in the next day?

[Elderly]

PD9 said:

So we could set up 2 accounts at 20K with Santander, setting up a third with XYZ Bank. Arrange the £500.00 to come out of both accounts into the 'mule' account and standing order it back in the next day?

As you say "we", you (two?) could set up a third 123 account to keep say £9.5k in the third and £500 in the 'mule' but because there's a £2.00 per month account charge, the benefit of the 3% in the third account is slightly reduced, so ask yourself if you want the extra bother of a third set-up.
My wife and I have multiple 123 joint and single accounts and feed them all from one 'mule'.
We do it starting with £500 coming out of the 'mule' into the first 123 and so on ...... simples!

One thing to be aware of is that it's £500 every month from opening the account, not £500 every calendar month.
Say you open it 15th November and put in £20,000 instantly, November is then funded but don't put in the next month's £500 until at least one month after the opening or it won't count; ie don't set up your standing order to pay in before 16th of subsequent months.
I think I've made it seem more complex than it is ........ but once you've worked out the set-up it runs itself.

[PD9]

It all makes sense now. I went out earlier and met with Santander and our own banks for info. All seems well and the above plans should be running smooth by the end of next week when all falls into place. Thanks again Elderly.