Savers can squeeze more interest from their nest-eggs — despite the Bank of England’s decision last week to leave its Base Rate unchanged at 0.5 per cent.
With Money Mail’s ploy, you can boost your annual interest by as much as £96.
All you have to do is recycle money sitting in an easy-access saver into a regular savings account over 12 months. Then you put it back into the easy-access account, having made more interest.
Big banks pay as little as 0.05 per cent on easy-access accounts. They offer up to 5 per cent on regular savings, but limit deposits to around £200 or £300 a month.
Beat the base rate: With our ploy, you can boost your annual interest by as much as £96
Ensure you don’t need the money for a year, as most banks don’t allow withdrawals until the term is up.
How much extra you make will depend on where you have your current account.
First Direct’s Regular Saver pays 5 per cent fixed on up to £300 a month.
You can only open this if you already have its First current account. Your £300 a month will build up to £3,697.50 after a year, including £97.50 interest.
The simple trick increases your interest by £95.70 from the pitiful £1.80 you earn if you leave your £3,600 in its easy-access account at 0.05 per cent.
If your money is in an easy-access account paying the average 0.46 per cent, you’ll boost your interest by nearly £81 (earning £97.50 instead of £16.56).
You’ll even double your interest from the £47 you’d earn in the top easy-access account at 1.32 per cent.
You will also earn more than the £65 payable on £3,600 in a top one-year bond at 1.8 per cent.
Unfortunately, you cannot double your gains by opening two accounts. In line with other banks, First Direct limits you to one account a year.
HSBC Regular Saver pays 5 per cent fixed to its Premier and Advance customers and 3 per cent to those with its Bank Account.
By recycling the maximum £250 a month from its Flexible Saver at 0.05 per cent to the 5 per cent, you boost your interest on £3,000 from a derisory £1.50 to £81.58. At the lower 3 per cent, you will still earn a better £49.
M&S Bank, which, like First Direct, is owned by HSBC, has a similar deal. You can open its Monthly Saver if you’ve switched to the bank and have two active direct debits.
The most you can save is £250 a month, giving you £81 interest on your £3,000.
Santander 123 customers can pick up 5 per cent on £200 a month in its Regular eSaver. You’ll earn £64 interest, rather than a miserly £6 on your £2,400 in its eSaver or Everyday Saver at 0.25 per cent.
Nationwide Flex Regular Online Saver pays 5 per cent, but the rate is variable. Unlike the M&S, First Direct and HSBC accounts, you can withdraw cash at any time.
Ensure you move your cash at the end of the year, when banks will move it into easy-access accounts that pay as little as 0.05 per cent.
You can then carry on recycling by opening a new account, if the rate differential still makes it worth doing.
If your current account bank doesn’t offer a regular saver, you will earn less. Saffron BS pays 3.5 per cent fixed on its Regular Saver, available via its branches. A £200 monthly saving earns £46 over a year.
Halifax’s 2.5 per cent fixed on £250 a month will give you £37.50 interest, up from £6 if you left your £3,000 in the bank’s Everyday Saver at 0.2 per cent.