Small but important.

[Borntobeamum]

I have an HSBC current Premier savings account that pays 2.25%.

I also have a Chase savings account that currently pays 4.85%.

I have recently received some compensation for an injury and it was paid into my HSBC account.

I know HSBC do other savings accounts but should I transfer the compensation into my Chase for the time being. It’s not a huge amount but obviously will attract more interest.

I did a test transfer of £1000 yesterday but just can’t seem to decide what to do.

Please be gentle with me - this has taken 4 years to be settled and although not a life changing amount, it’s huge to me.

Many thanks x

What are the rules around accessing the money in your Chase account? It may be that you can only make 3 withdrawals a year, or you can only deposit a certain amount. Assuming it's an easy access account, so you can put money in and take it out at any time without restrictions, yes it definitely makes sense to put the compensation into the Chase account for the time being.

If it's the Chase Boosted Saver, then yes it's instant access, so there's no downside to moving your money across to get the extra interest.

Someone give me a kick up the backside - I’m just so wary of transferring a relatively large amount! 🫤

Well there's no reason not to transfer it over in smaller amounts - again, as long as there's no limit on the number of deposits you can make. Is it the Chase Boosted Saver?

Can you explain exactly what the problem is?

You can transfer it however you like. How much roughly are we talking? Is it going to take you hours if you transfer £1000, wait to see it arrive and then transfer another £1000 if that's what you're comfortable with?

If we're talking 100k, then maybe do another couple of £1k transfers and when you can see it's going through perfectly fine then you can do the rest, or even up it to £10k at a time.

Yes it’s the boosted one.

The solicitor ran me on Monday and said he’d received the money and was checking the correct bank.

Obv I gave him the correct details again and he said to look out for it. It was late yesterday aft before it appeared - taking over 48 hours.

I don’t think I could do with the stress of waiting for it to swirl around in the banking system before landing safely.

Bank transfers done using the BACS process, which is the normal route for solicitors I think, take 3 days. However, transfers between your own accounts, under the 25K limit, should go via Faster Payments and be almost instant. Has the £1000 you sent to Chase yesterday arrived? It absolutely makes sense to wait until it's there, and then do a couple more relatively small transfers so you're comfortable with how long the payment takes to arrive. No need to transfer larger amounts until you're comfortable.

If the test transfer arrived safely, go ahead and move the rest. 2.25% is a terrible savings interest rate at the moment. I'd put everything in Chase (up to the £85k compensation limit).

Of course you should move it, why would you throw away free money. I transfer largish sums all the time anfhave never had a problem.

You could put up to a maximum of 20k per tax year into an ISA
All the interest will be tax free

Look on Money Saving Expert for the highest paying ISA or if you are under 40 a LISA

Yes move it, it’s a no brainer.

Think about the tax implications.
if you pay income tax on your current income, then you need your savings to be in a tax free account. You can only earn £1k interest in an ordinary savings account before you have to pay tax.

So a slightly lower rate in an ISA, which is tax free, may be a better option.

We keep under £20k in an ordinary savings account for instant access as our rainy day account, and then have the rest in ISAs

Premium bonds are also tax free, but the return isn't guaranteed, so an ISA may be the best for you.

You can put £20k in an ISA now, and the rest in your rainy day account and Premium bonds, and then add another £20k to a new ISA on April 7th, when the new tax year starts.

Hope this helps

Many thanks for al your advice.
I’ve transferred it into Chase.
I’m not a tax payer - 62, retired and a kept woman!
I already have an ISA and this money won’t be touched. It’ll just sit there making more interest than the other account.