New TSB account: how to make £600 a year
TSB has hit the headlines with the launch of its new Plus current account promising 5% interest on balances of £2,000, worth £100 a year, but a Moneywise investigation has found how couples can get six times that.
There's nothing in TSB's terms and conditions to stop customers taking out two individual accounts - which could earn them up to £200 a year - but couples are also both able to open a joint account, providing they transfer £500 in to all of the accounts each month.
That means couples can open six accounts between them, potentially earning themselves up to £600 in interest over the course of a year if they deposit £2,000 in each of the six accounts.
That's a much better rate of interest than anything else currently available on the market – although the Plus account won't actually arrive until the end of the month.
For example, the next best rate is the 3% the Santander 123 current account pays on balances of between £3,000 and £20,000, but customers must pay £2 a month for the account.
Additionally, while customers have to commit to paying in £500 a month to each Plus account they open – which, in the case of a couple with six accounts between them, would amount to £3,000 a month – the money does not have to be a direct credit and can be paid in over the counter.
Moreover, as long as each account has a balance of £2,000, there's nothing to stop customers withdrawing the £500 monthly deposit immediately after paying it in. This means a couple wouldn't necessarily have to tie up £3,000 a month – or £36,000 a year – to earn the £600 in interest.
Make the effort
Personal finance expert Andrew Hagger of Moneycomms.co.uk, said: "If you're prepared to put in a bit of effort up front to open the maximum number of permitted accounts, then the TSB Plus account gives you the ability to obtain a savings return far in excess of any instant access savings account and even more than you'd get for locking your cash away for seven years in the First Save fixed-rate bond that pays 3.5%."
A TSB spokesperson confirmed to Moneywise that there is nothing to stop a customer opening two individual Plus accounts, plus a joint account – or to prevent a couple opening up to six accounts between them.
This is more usually a feature of car insurance but it can also crop up in contents, mobile phone and pet insurance policies. An excess is the amount of money you have to pay before the insurance company starts paying out. The excess makes up the first part of a claim, so if your excess is £100 and your claim is for £500, you would pay the first £100 and the insurer the remaining £400. Many online insures let you set your own excess, but the lower the excess, the more expensive the premium will be.
An account opened with a clearing bank (few building societies offer current accounts) that provides the ability to draw cash (usually via a debit card) or cheques from the account. Some pay fairly minimal rates of interest if the account is in credit. Most current accounts insist your monthly income (salary or pension) is paid directly in each month and they offer a number of optional services – such as overdrafts and charge cards – which are negotiable but will incur fees.