How Collecting Bank Accounts Is Helping Me Maximise My Savingsfeatured

Beanie Babies, Pokémon cards and The Simpsons memorabilia - I’ve had my fair share of collections over the years.

Now that I’m 26, I’m pleased to announce I’m no longer hoarding Pogs or gel pens and instead, I’m collecting something really sensible - bank accounts. Seriously. What has happened to me?

I used to think the world of banking was terrifying and thought that opening a new bank account would be a long winded process full of complicated terminology and distressed phone calls to my mum. “Muuum. What does AER mean?” Well, thankfully, it turns out I was wrong and opening a second, third or even fourth bank account can take as little as 10 minutes. (Unless you’re opening an account with Lloyds - a pain in the arse as I’ll explain later)

Since realising how easy it can be to open new bank accounts and reap the associated rewards, I’ve found myself a little bit addicted to the process. It feels great to organise my savings into different categories and it’s reassuring to know I’m getting decent interest on my money. By spreading my savings across multiple accounts, I’m now earning far more interest in a month than I used to get on my 0.25% Cash ISA in a year.

Let’s take a look at the bank accounts that are helping me maximise my savings with minimal effort…

Please note that opening new bank accounts can temporarily affect your credit rating so proceed with caution if you’re hoping to buy a property in the near future.

My Day to Day Spending Fund – Halifax Reward

Every month, my salary is paid into my Halifax Reward account. This is also my ‘Day to Day Spending Fund’ and is used to buy stuff such as food, entertainment and clothes etc.

Halifax Reward offers account holders a £5 a month reward providing you do the following:

• Pay £750 into the account each month
• Have two direct debits leaving the account each month
• Stay in credit & don’t go overdrawn

I don’t keep very much money in this account as there’s no real incentive to do so. I’m best off keeping as much money as possible in my other accounts (as you’ll see below) and moving money back to my Day to Day Spending Fund if and when I need it.

My First Home Fund – Halifax Help to Buy ISA

Each month I transfer £200 into my Halifax Help to Buy ISA.

This a great account to have if you’re a first time buyer and would like to buy a home one day.

For every £200 you place in a Help to Buy ISA the government will top your savings up with an extra £50.

Fortunately, I opened my Help to Buy ISA with Halifax when it offered a decent 4% interest. This interest rate has since dropped down to 2.5% for new customers.

You might also like: Why You Should Get A Help to Buy ISA Even If You Don’t Know Where You’ll Be In 5 Years

My Monster Savings Fund – Santander 123

Every time pay day comes around, I move a big chunk of my wages into a Santander 123 account aka my Monster Savings Fund.

Santander 123 pays a decent 3% on balances between £3,000 and £20,000, providing you:

• Pay £500 in each month
• Have two direct debits leaving the account each month

Santander also offers cashback on selected household bills.

I never use this account for day to day spending and don’t even carry the card around. I do, however, use it as a sort of home/base for my savings. With most current accounts demanding that you deposit a certain amount of cash in them each month, I use this account to fulfil the demands of the bank accounts I list below.

To make the process as simple as possible, I have several standing orders set up to transfer chunks of cash from my Monster Savings Fund to the accounts below. I also have standing orders in place to move this money back again a few days later. Since this whole process is automated, I don’t need to think about it and there’s no risk of me forgetting.

You might also like: Is Santander 123 Really The Best Place To Put Your Savings?

My Emergency Fund – Club Lloyds

I’ve chosen Club Lloyds as the home for my Emergency Fund as it pays 4% on balances between £4,000 and £5,000. If I ever lose my job or face an urgent expense, this money will protect me and give me peace of mind.

To qualify for Club Lloyds’ 4% interest, you need to:

• Deposit £1,500 into the account each month
• Have 2 direct debits set up

There’s just one problem. Opening a Club Lloyds account is proving to be the biggest ball ache ever. I think I’d find it easier to join Muirfield Golf Club than I’m finding it to join Club Lloyds.

After filling in the application form online, I received an email to say that my application would remain incomplete until I pop into my nearest branch with proof of my address. Since I’ve only lived at my current address for a couple of weeks and don’t yet have any documentation to prove where I live, this is going to be tricky!

My Tax Fund – TSB

At the end of the tax year, I’ll have to complete a self assessment tax form and pay tax on the freelance income I’ve earned. To ensure I’m prepared for this expense, I’ve set up my own ‘Tax Fund’ so that I always have that money ready no matter what.

TSB pays a whopping 5% on balances up to £2,000 providing you:

• Pay £500 in each month
• Register for online banking and paperless statements

So each month, £500 leaves Santander 123 and visits TSB for a few days. It then goes back to its base, Santander 123.

In order to get the most interest possible, I keep as close to £2,000 in the account at all times. Again, any interest I earn that takes me over the £2,000 limit is moved to either my Monster Savings Fund or transferred to my Day to Day Spending Fund if necessary.

My Retirement Fund – Nationwide Flex Direct

Okay, I haven’t actually opened this account yet but it’s next on my list because I’m seriously starting to freak out about my lack of retirement savings.

I work for a relatively small business and so there isn’t a workplace pension plan in place just yet. So, until auto-enrolment comes into play for us, I’m workplace pensionless! I’ve decided to set aside my own little retirement fund so that when a workplace pension is available, I can’t use the old “oh but there are SO many other things I have to pay/save for” excuse. After all, I’ll already have a modest stash of cash to hand to funnel into my proper pension if necessary.

Nationwide Flex Direct offers 5% on up to £2,500 providing:

• 2 direct debits leave the account each month
• You pay in at least £1,000 in the account each month

However, the interest is only for the first year. Once your year is up, the interest dips down to 1% - so it’s time to move this money elsewhere.

There are no doubt smarter ways for me to start preparing for retirement rather than stashing my cash in a high interest current account, but this is perhaps one of the simplest (and low risk) ways of getting started. I’m keen to start investing but until I know what I’m doing and have done a substantial amount of research, I’m going to play it safe.