Anyone juggling multiple bank accounts to keep under the 50K protection limit??

[faraday]

How do you manage it? Do you have a spread sheet cos you'd need to know what was where, when you can add or withdraw from each, penalties, when the rate changes so you need to rethink etc! ARE you constantly moving it around?

We have a house sale lump sum and daren't risk it all in one account (and need to earn SOME interest on it thus Northern Rock's 100% guarantee, being at 2% is barely worth it!). I have to set up these 4 accounts, or at least 3 more next week when the sale money arrives.

....it isn't that hard, really.

You just need to be aware of who is the parent company for each brand. Fixed term bonds are the best, but I think the best rates available even on these currently are a less than munificent 3.55%

For example, I have a fixed term bond with Birmingham Midshires (at 6.7%! Took it out last August) and another with AA at 4.55. This is, on close inspection, also a BM account (which in turn is under the HBOS/Lloyds umbrella) so I have limited the total to 50k, and ensured that other deposits were with different groups (including Premium Bonds. Martyn Lewis would have me shot for this but hey. It is safe, brings me £50-100 tax free monthly and can be cashed quickly if needs be)

Sadly the lump sum is just about to exit a foreign account earning 4.74%..

Its so hard to find halfway decent interest rates, well done for making the attempt... I'd like to claim to be too busy but actually am too lazy so am earning virtually no interest. Just make sure you go for 3/4 actual separate institutions (I just had to help my granny who had hers with rbs and natwest, thinking they were different people). If all the institutions have internet banking on offer that would help you a lot - if not then sounds like a spreadsheet may be your best bet.

Also, if you are married and one of you is not a tax payer/is taxed at lower rate than the other then remember to keep all the savings account in the name of the non/lower tax payer.

er.... no

sorry, but how can it be that hard?

remember to use your isa allowance before the end of this tax year (2008-2000) and then shove it straight in next tax year when that begins, i think date is 5th april so you havnt got long. but as long as it is in an isa, then you can move it around to a better one later.

given interest rates are low you might also consider premium bonds? limit is 30k i belive, depends on how much time the money will be sitting around for.

oh and remember if its a joint account you get 100k protection ie its 50 k per institution per person as opposed to household/couple.

It's hard in that for example the savings account we opened with A&L about a month ago has dropped from 3.1% to 2.06%. No emailed notice, no nothing, just me trawling their site to check the rate. And seeing they have Issue 4 out now at 3%. And knowing I'll have to forego a month's interest on ALL that money if I switch. For instance!

Martin Lewis is campaigning to force banks to give the current interest rate on all your ordinary (non-bond/fixed term) accounts when you open them online to prevent this. SO short of checking every account just about every day, there's no relatively easy way you know you're getting the best rate.

TBH, premium bonds aren't really worth it. We'd be better off with a Northern Rock saver (2%!) where we could also safely stick all the money. But we do need an income to pay the rent!

Re the 50k, I was pleased about that at least otherwise we'd've needed twice as many accounts!

we've luckily got an offset mortgage, given parlous state of savings industry, its been a bit of a godsend.

About offset mortgage - I read in the FT (but it gave no source) that if your mortgage provider goes bust they're entitled to hold on to all your offset money (obviously reducing the amount you owe though )

Does anyone know if that's true?

it depends on the set up. we have a standalone accounts (e they function as seperate accounts in their own right - ie if we didnt have a mortgage they would still exist) where we have chosen to forego interest. I understand some offsets operate differently to this.

I did take legal advice on this issue as was slightly nervous, and was told offset savings account we held were safe.

Regarding offsets, I understood that indeed ALL the money in the offset will be treated like mortgage payment (cos effectively that's what it is!)- it hasn't been tested in law yet seeing as no other bank has got close to going under just recently, but I'd think one'd be better perhaps DOING that 'couple of months' safety net savings thing separately, JUST in case.

We are fortunate in that we hope we won't need a mortgage at all when we eventually buy here, but we bought a house overseas (the one we've sold recently) using an offset mortgage and it was fantastic! We saved SO much interest payment it wasn't funny!

To do this well you will need to put in some work.

First off the major banks now own a number of sub-banks and savings brands. Some will have a seperate £50k limit and some will not. The reality is that Lloyds (incl. HBOS and Birmingham Midshires) is pretty much nationalised and so safe. Likewise RBS which owns Natwest. Bradford & Bingley, Abbey, Cahoot and Alliance & Leicester are all owned by the Spanish group Santander.

Instant access accounts pay very little and so for best rates go for fixed term bonds. e.g. Abbey at 4.1% for 2 years.

If not fixed rate/term any account you use is, in time, likely to become uncompetitive and so needs close attention.

With a lot of accounts you will indeed need some kind of spreadsheet/notebook to keep track.

A bank will practically always have the right of set off (nothing to do with set off mortgages!) so that they can merge your debits and credits - so obviously with a set off mortgage they will be able to do this. A lot of mortgages will have an "all sums" clause, so if you're planning on having credit cards or personal loans that are not secured on your property, it's a good idea to have them with a different bank so that they don't become effectively secured on your property by the back door (no poun intended!).

not if your contract states that they cant, which ours does. so as long as we stay under 100k threshold as a couple our savings are safe,and still offsetting against our mortgage at far better rate then saving can offer.