Possible Cahoot loophole

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joe.marshall_2
joe.marshall_2 Posts: 22 Forumite
in Savings & investments
I recently set up a Chaoot account with both a current and a savings account.

The current account gives me an overdraft limit of GBP500, of which the first GBP250 is stated as interest free (I don't know for how long).

However, it would appear that if I transfer this GBP 250 to the savings account, it will gain interest at 5.5%.

Is this correct? If so, it looks like a good loophole!

Joe
Titch :)
«1

Comments

  • System
    System Posts: 178,094 Community Admin
    Photogenic Name Dropper First Post
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    Nice one Joe
  • lswwong
    lswwong Posts: 407 Forumite
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    I agree! ;D

    I have gone overdrawn on my Cahoot current account before (with the same overdraft facility in place) and was never charged any interests as I kept the debit balance below -£250 at all times.
  • System
    System Posts: 178,094 Community Admin
    Photogenic Name Dropper First Post
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    :o
  • alared
    alared Posts: 4,029 Forumite
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    £250, will after tax, over 12 months, net you the grand total of
    £11

    If you accidently go into the red without this safety net it may well cost you a whole lot more!
  • joe.marshall_2
    joe.marshall_2 Posts: 22 Forumite
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    Hi Alared,

    Where's your "moneysaving" philosophy?! In my book, £11 is more than 4 free pints!

    This is not my primary current account - I opened it to use the high (5.5%) interest on the savings account (although it appears attractive in itself, with 4.1% interest on current account balances!).

    In these circumstances, WHY NOT take advantage of the opportunity!

    Joe
    Titch :)
  • alared
    alared Posts: 4,029 Forumite
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    Yes Joe, I agree with your sentiments,I was just warning that should anyone accidently slip into the red, the £11 could easily be wiped out in one fell swoop.
  • johnllew
    johnllew Posts: 1,928 Forumite
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    It's not a "possible", it's a "definite". My and my wife's accounts have been overdrawn permanently by £250 each for 4 years now with no problems. Even if you do stray over the £250 limit (though we never have done), the overdraft rate is very competitive at around 9.8%.
  • Leia_Stephens
    Leia_Stephens Posts: 231 Forumite
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    So, you can be overdrawn on a Smile current a/c up to £250 for quite a while without incurring any charges at all ??? ;D

    sorry for a rather obvious question, the temperature is making my brain sluggish this afternoon ;)

    Leia
    I want to be a good saver, but I find it difficult to control my temptation to spend :o .

    I owe £1,247 more than I have in savings :( .
    .
  • quinlanmd
    quinlanmd Posts: 92 Forumite
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    ???

    Smile: fee free up to £500. Interest free (up to £260) only if paying £6 per month for Smilemore.

    Cahoot: interest and fee free up to £250
    Up Tipp!
  • johnllew
    johnllew Posts: 1,928 Forumite
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    So, you can be overdrawn on a Smile current a/c up to £250 for quite a while without incurring any charges at all  ???
    No, my comments above related to our Cahoot current accounts. There is no interest-free overdraft on the normal Smile c/a.
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