Post SSIA a/cs - best to open one or more?

[dakan]

Hi Folks

I have been reading in that new Eddie Hobbs money magazine, the idea about dividing your SSIA money between the four main post SSIA savings a/cs i.e Halifax and AIB etc.

For those of you that haven't heard about this, the idea is that you divide your SSIA money amongst the four a/cs to get the benefit of the high interest rates. As the first one expires and the special interest rate is reduced to a lower rate, you take the money out and divide it amongst the other three. And so on till you have all your money in the last one.

My question is, why not but all of your lump sum into the highest interest bearing a/c. Then move it all into the next highest when that a/c reduces the special interest rate. Am I missing something obvious? Will spreading it out amongst many a/cs reduce DIRT tax?

Any advice on this is appreciated.

Kind Regards
Dakan

 

[z108]

Rabobank has a limit of 10 grand receiving the attractive high rate and other banks have an expiry date beyond which the previously attractive rate becomes rather crappy and its probably this reality which are the reasons for shifting the money around or dividing it up.
Actively managing who is trusted with it is the way to go.

 

[cathkc]

"Rabobank has a limit of 10 grand receiving the attractive high rate "

I have a Rabo account with about 5k in there. I am about to lodge another 10k. So my total in Rabo will be 15k. Does this mean I will only get the 5% on 10k of my total savings? What rate will I get on the other 5k?

 

[Dreamerb]

What rate will I get on the other 5k?

3.75%

You night be better putting just the 5K in Rabo and the balance in Northern Rock or highest other lump sum rate you can find. Have a look at the best buys forum to get an idea of rates.

 

[Blinder]

My question is, why not but all of your lump sum into the highest interest bearing a/c. Then move it all into the next highest when that a/c reduces the special interest rate. Am I missing something obvious? Will spreading it out amongst many a/cs reduce DIRT tax?

I think this is because the offer to open the accounts will be limited.
So if you put all of the money into one account, by the time that offer expires you will not be able to open another ssia lump sum account.
Also there could be something in the terms and conditions that limit you from opening the ssia lump sum ac**** when the money has already being placed into another ssia lump sum account. ( or opening the ssia special ffer account if you didn't have a ssia)

As I said, this is what 'I think' is the reason. But I could be wrong