How to get 2.36% interest on your £50,000 savings – the Moneywise model savings portfolio

Published by The Moneywise Team on 09 November 2017.
Last updated on 18 January 2019

Cash savers continue to battle against low interest rates and poor returns across the market, but there are ways to get more out of your savings pot.

With the effect of high inflation also whittling away the real value of cash, savers are looking for new ways to beat the savings market.

Moneywise and Savings Champion have created a model savings portfolio which helps savers get the best return possible return on their cash.

The rules

Our portfolio is based on using high interest current accounts, regular savers and one-year bonds in order to maximise your total return.

Money will be drip fed through the accounts in order to achieve the best returns. There is some legwork involved in setting up this portfolio, but we think the returns make it worthwhile.

There are ways in which you can earn slightly more interest, but this will require multiple current accounts. We have limited our portfolio to two current accounts for simplicity.

Many current accounts have requirements such as minimum pay-ins each month and need a number of active direct debits. Make sure you have ‘float money’ on top of the figures listed below so that you can pay your direct debits each month.

Also ensure that by the end of the year you do not go overdrawn on any of your current accounts, as this is likely to incur fees and charges. We’re looking at a one-year timeframe in our analysis and will not include accounts that charge a fee.

Depending on how much you’re saving, we have two model portfolios for you to use. If you want to get the best return possible on a smaller sum, you can try the £10,000 Moneywise model savings portfolio instead.

£50,000 savings portfolio

For a £50,000 cash pot you will be able to maximise your savings by using a pair of current accounts, a linked regular saver and a fixed rate one-year bond.

To start, you need to open the following four accounts;

Over the year this will have generated £1,182, an effective return of 2.32%. £50,000 cash saved in a typical high street easy access saver would have generated just £75, based on an interest rate of 0.15%.

This mean a saver has made an additional £1,107 by using the model savings portfolio.

Note, the Gatehouse account's rate is an expected profit rate (EPR). Find out what this means in our guide.

Existing savings accounts

Here's what a typical savings account will give in interest per annum:

Account Amount AER % Gross interest per annum Notes
HSBC Flexible Saver £50,000 0.15% £75 Easy access
Total savings £50,000 0.15% £75  

Recommended savings accounts

And here's what you can get with the Moneywise portfolio of savings accounts:

Account Amount AER % Gross interest per annum Notes
High interest current accounts
Nationwide Building Society FlexDirect current account £2,500 5% £125 Bonus ends after 12 months
Tesco Bank Current Account (feeder account) £2,750 3% £41.25 Diminishing balance to fund regular saver
Regular savers
Nationwide Building Society - Flex Regular Online Saver £250 pm 5% £81.25 12-month term
Fixed term bonds

Gatehouse Bank 1 Year Fixed Term Deposit

£44,500 2.05% £934.50 12-month term
Total savings £50,000 2.32% £1,1182.00  
Maximise the interest you can earn Increase in gross returns of £1,107 in year one

You will be required to move money between your accounts in order to meet the minimum monthly pay-in requirements, but these can be set up as standing orders. Leave a couple of days between these money transfers to ensure the money has cleared in your account and you don’t go overdrawn.

For the Tesco Bank Current Account you will need to pay in at least £750 and pay at least three direct debits each statement month. The Nationwide FlexDirect does not require any direct debits, but you will have to pay in £1,000 a month or more.

Here’s how to do it.

Month 1

Day 1

Open and deposit £44,500 in Gatehouse Bank 1 Year Fixed Term Deposit

Open and deposit £2,500 in Nationwide FlexDirect

Open and deposit £2,750 in Tesco Bank Current Account

Open and deposit £250 in Nationwide Flex Regular Online Saver

Final balances:

£44,500 Gatehouse Bank 1 Year Fixed Term Deposit
£2,500 Nationwide FlexDirect
£2,750 Tesco Bank Current Account
£250 Nationwide Flex Regular Online Saver

Month 2

Day 1

Transfer £250 from Tesco Bank Current Account to Nationwide Flex Regular Online Saver

Transfer £1,000 from Nationwide FlexDirect to Tesco Bank Current Account - meets funding requirement

Day 4

Transfer £1,000 from Tesco Bank Current Account to Nationwide FlexDirect – meets funding requirement

Final balances:

£44,500 Gatehouse Bank 1 Year Fixed Term Deposit
£2,500 Nationwide Current Account
£2,500 Tesco Bank Current Account
£500 Nationwide Flex Regular Online Saver

Month 3

Day 1

Transfer £250 from Tesco Bank Current Account to Nationwide Flex Regular Online Saver

Transfer £1,000 from Nationwide FlexDirect to Tesco Bank Current Account – meets funding requirement

Day 4

Transfer £1,000 from Tesco Bank Current Account to Nationwide FlexDirect – meets funding requirement

Final balances:

£44,500 Gatehouse Bank 1 Year Fixed Term Deposit
£2,500 Nationwide FlexDirect
£2,250 Tesco Bank Current Account
£750 Nationwide Flex Regular Online Saver

Month 4

Day 1

Transfer £250 from Tesco Bank Current Account to Nationwide Flex Regular Online Saver

Transfer £1,000 from Nationwide FlexDirect to Tesco Bank Current Account – meets funding requirement

Day 4

Transfer £1,000 from Tesco Bank Current Account to Nationwide FlexDirect – meets funding requirement

Final balances:

£44,500 Gatehouse Bank 1 Year Fixed Term Deposit
£2,500 Nationwide FlexDirect
£2,000 Tesco Bank Current Account
£1,000 Nationwide Flex Regular Online Saver

Month 5

Day 1

Transfer £250 from Tesco Bank Current Account to Nationwide Flex Regular Online Saver

Transfer £1,000 from Nationwide FlexDirect to Tesco Bank Current Account – meets funding requirement

Day 4

Transfer £1,000 from Tesco Bank Current Account to Nationwide FlexDirect – meets funding requirement

Final balances:

£44,500 Gatehouse Bank 1 Year Fixed Term Deposit
£2,500 Nationwide FlexDirect
£1,750 Tesco Bank Current Account
£1,250 Nationwide Flex Regular Online Saver

Month 6

Day 1

Transfer £250 from Tesco Bank Current Account to Nationwide Flex Regular Online Saver

Transfer £1,000 from Nationwide FlexDirect to Tesco Bank Current Account – meets funding requirement

Day 4

Transfer £1,000 from Tesco Bank Current Account to Nationwide FlexDirect – meets funding requirement

Final balances:

£44,500 Gatehouse Bank 1 Year Fixed Term Deposit
£2,500 Nationwide FlexDirect
£1,500 Tesco Bank Current Account
£1,500 Nationwide Flex Regular Online Saver

Month 7

Day 1

Transfer £250 from Tesco Bank Current Account to Nationwide Flex Regular Online Saver

Transfer £1,000 from Nationwide FlexDirect to Tesco Bank Current Account – meets funding requirement

Day 4

Transfer £1,000 from Tesco Bank Current Account to Nationwide FlexDirect – meets funding requirement

Final balances:

£44,500 Gatehouse Bank 1 Year Fixed Term Deposit
£2,500 Nationwide FlexDirect
£1,250 Tesco Bank Current Account
£1,750 Nationwide Flex Regular Online Saver

Month 8

Day 1

Transfer £250 from Tesco Bank Current Account to Nationwide Flex Regular Online Saver

Transfer £1,000 from Nationwide FlexDirect to Tesco Bank Current Account – meets funding requirement

Day 4

Transfer £1,000 from Tesco Bank Current Account to Nationwide FlexDirect – meets funding requirement

Final balances:

£44,500 Gatehouse Bank 1 Year Fixed Term Deposit
£2,500 Nationwide FlexDirect
£1,000 Tesco Bank Current Account
£2,000 Nationwide Flex Regular Online Saver

Month 9

Day 1

Transfer £250 from Tesco Bank Current Account to Nationwide Flex Regular Online Saver

Transfer £1,000 from Nationwide FlexDirect to Tesco Bank Current Account – meets funding requirement

Day 4

Transfer £1,000 from Tesco Bank Current Account to Nationwide FlexDirect – meets funding requirement

Final balances:

£44,500 Gatehouse Bank 1 Year Fixed Term Deposit
£2,500 Nationwide FlexDirect
£750 Tesco Bank Current Account
£2,250 Nationwide Flex Regular Online Saver

Day 1

Transfer £250 from Tesco Bank Current Account to Nationwide Flex Regular Online Saver

Transfer £1,000 from Nationwide FlexDirect to Tesco Bank Current Account – meets funding requirement

Day 4

Transfer £1,000 from Tesco Bank Current Account to Nationwide FlexDirect – meets funding requirement

Final balances:

£44,500 Gatehouse Bank 1 Year Fixed Term Deposit
£2,500 Nationwide FlexDirect
£500 Tesco Bank Current Account
£2,500 Nationwide Flex Regular Online Saver

Month 11

Day 1

Transfer £250 from Tesco Bank Current Account to Nationwide Flex Regular Online Saver

Transfer £1,000 from Nationwide FlexDirect to Tesco Bank Current Account – meets funding requirement

Day 4

Transfer £1,000 from Tesco Bank Current Account to Nationwide FlexDirect – meets funding requirement

Final balances:

£44,500 Gatehouse Bank 1 Year Fixed Term Deposit
£2,500 Nationwide FlexDirect
£250 Tesco Bank Current Account – cancel standing order so next month you don’t go overdrawn.
£2,750 Nationwide Flex Regular Online Saver

Month 12

Day 1

Transfer £250 from Tesco Bank Current Account to Nationwide Flex Regular Online Saver

Transfer £1,000 from Nationwide FlexDirect to Tesco Bank Current Account – meets funding requirement

Day 4

Transfer £1,000 from Tesco Bank Current Account to Nationwide FlexDirect – meets funding requirement

Final balances:

£44,500 Gatehouse Bank 1 Year Fixed Term Deposit
£2,500 Nationwide FlexDirect
£0 Tesco Bank Current Account – make sure you’re not overdrawn.
£3,000 Nationwide Flex Regular Online Saver

After the twelfth month the Nationwide FlexDirect bonus ends and the Nationwide Flex Regular Online Saver matures. Transfer your cash out of these accounts and start the process again.

Over the year this will have generated £1,182, an effective return of 2.32%. £50,000 cash saved in a typical high street easy access saver would have generated just £75, based on an interest rate of 0.15%.

This mean a saver has made an additional £1,107 by using the model savings portfolio. 

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Leave a comment

On accounts where you have to

On accounts where you have to deposit, say £500, every month, you can simply withdraw the amount each month and pay it back a minute later.

Hi Allan, yes you could

Hi Allan, yes you could transfer money manually each month but we think most people will find it easier to set up standing orders at the start of the year and let the portfolio run itself. 

Can you pleas tell me -

Can you pleas tell me -

In your Model Portfolio:
Why does £10,000 generate 3,25% interest, but £50,000 generates ONLY 2.25% interst?

Hi Elizabeth, the £50,000

Hi Elizabeth, the £50,000 portfolio generates a smaller effective interest rate becuase a higher proportion of the funds are in the Atom Bank One Year Fixed Saver at 1.95%. In the £50,000 portfolio, £44,500 of the total savings pot is in this account whereas in the £10,000 portfolio it is £4,500.

Can you do this year on year

Can you do this year on year or is it only for one year?

Hi - i cant see how this

Hi - i cant see how this meets the Tesco Bank requirement to pay 3 D/Debits every month?

That's a lot of effort for

That's a lot of effort for not a great amount of return relative to just placing the whole 50k in the 1.95pc account.