5% Savings Loophole

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5% Savings Loophole guide.

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• One way to minimize your initial outlay is to open two TSB accounts in your partners name and send the first Ј500 STO from your main external account, 'bounce' the Ј500 between each (you->partner->you->partner->you) and return it from the last account into your main account. It works perfectly for a 5% interest gain. Otherwise for no additional outlay use your Ј500 from your first TSB account (reducing it temporarily to Ј1500) into your main account and return it starting at step one above...it's called recycling!!
• Great guide, except that having two FlexDirect accounts both with 5% interest seems only to be possible for join accounts...
  Quote:
• Hi Guys,
  I'm new to MSE and I'm probably being a bit thick, but I wanted to clarify something about the accounts that require say Ј500 to be paid in each month, does that Ј500 have to stay in there for a certain amount of time?
  I know in the article it said move it in and straight back out again, but I just wanted to double check in case I had misunderstood!
  Thanks
  Hannah x
• The article says:
  Quote:
• Thanks for highlighting this loophole, it takes a bit of time and patience to set it all up but now reaping the rewards. Just had notification of reduction in interest on my original savings account so I feel even better about it.
• I am currently living off savings with no earned or benefit income having chosen to do unpaid voluntary work for the timebeing. Wanted to improve my returns by taking out a Classic Plus account to get the 5% interest on Ј2,000. Am quite capable of making monthly deposits of Ј500 from other savings. Since this is the only operating requirement and if I don't make the deposit it's my loss as I wouldn't get the interest there is no risk to the bank but they have tuned me down. Although they would let me have the ordinary Classic account (which of course is of no interest to me as it does have the interest).
  Very helpful and pleasant staff in the complaints department but the decision by the relevant department appears completely illogical (think it was the lending department which in itself is daft as I am not asking for a loan or overdraft!).
  TSB - the bank that likes to say no! Not so different after all.
• Duplicate of your post in this thread, calcotti. No need to post things twice as people will read threads on more than one board.
• "So let's imagine you want to open two Nationwide FlexDirect*, two Tesco Bank and two TSB Classic Plus accounts to earn over 4% on up to Ј19,000"
  I must be doing the sums wrong, but using the example quoted I make the amount you can save to be Ј14,000?
• Good Info. I have 3x BOS and No ISA
• Signed up to buy a new house and started raising the cash and as I will need it in pretty short order tying up in fixed rates not an option so I've utilised the current account available on the market to store the savings whilst the house is slowly being built.
  In Interest Rate order, I have:
  Nationwide FlexDirect 1xЈ2,500@5%
  TSB Classic Plus 2xЈ2,000@5%
  Club Lloyds 1xЈ5,000@4%
  Bank of Scotland Classic Vantage 2xЈ5,000@3%
  Santander 123 1xЈ20,000@3%-Ј2pcm
  The Mrs and I are about to open a joint Santander 123 so from the article it then looks like we could get a Club Lloyds (joint), NW FlexDirect (joint) and one further Tesco Bank account.
  Does anyone know how many Bank of Scotland Classic Accounts an individual can have?
  I also have a few regular saver accounts that allow early closure without drastic penalties.
  The balance I had then opted to pay into a Birmingham Midshires Online Extra @ 1.6% but they have just dropped the rate to 1.35% so it'll stay in a Nationwide Loyalty Saver @1.5%. Anyone know of anything better?
  st1sof
• Individual can have 3 x BoS Classic Vantage accounts.
  You mention additional Tesco, but no Tesco accounts in your list? Individual can have 2.
  Also Club Lloyds for your wife?
  Club Lloyds Monthly Saver each?
• Hi Badger09,
  Thanks for responding. I do have 1 Tesco CA, table updated below.
  In Interest Rate order, I have:
  Nationwide FlexDirect 1xЈ2,500@5%
  TSB Classic Plus 2xЈ2,000@5%
  Club Lloyds 1xЈ5,000@4%
  Bank of Scotland Classic Vantage 2xЈ5,000@3%
  Tesco Bank Account 1xЈ3,000@3%
  Santander 123 1xЈ20,000@3%-Ј2pcm
  Club Lloyds Monthly Saver already in operation.
  Getting individual accounts for the Mrs is asking a lot really. It's taken ages to persuade her to go for the Santander 123 and only because you can squirrel away Ј20k in one go. She's not interested in all the hassle of setting up these accounts and looking after them so I choose to fight the battles I have a chance to win, joint accounts are such a battle.
  st1sof
• Is your wife buying this house with you?
  Does she have savings in accounts earning less than 3%?
  If so, she is definitely missing a trick
  Can you persuade her to read this forum?
  If so, as she is a woman, so obviously is blessed with superior intellect, then I'm sure she'll see the advantage of opening her own high interest current accounts. It really isn't much hassle
• Would this work (I assume yes, just making sure)
  Club Lloyds current account - Ј5000 initial
  Setup Ј500 standing order from my main bank account of Ј500 say 15th of each month and setup standing order from Lloyds to my main account 16th of each month?
  I assume if I add another account, eg tsb I can do Main > Lloyds > TSB > Main
  Thanks!