5% Savings Loophole

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  • soldave
    soldave Posts: 59
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    peter_333 wrote: »
    Was thinking the same re: closing some of my high-interst current accounts, but on second thought, they're still the best short-term, low-risk option out there.

    True. I also have to move some DDs around to my BOS accounts as they stopped gaining interest from September and now need two DDs as well as money going into them each month.
  • King_Drax_I
    King_Drax_I Posts: 74
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    edited 23 November 2016 at 9:31AM
    I've just started setting this system up as described, in the last week or so. I thought I'd write up my observations about how it's worked so far.

    Here's my account set:

    I've set up a second Club Lloyds account as a joint account with my daughter; my main Club Lloyds account I already have is in my sole name. With Santander; I already have a sole and a formerly joint account. This is because my wife died recently, and two sole accounts are allowed if one of them was formerly a joint account which then becomes a sole account.

    I have opened three Bank of Scotland (BoS) Classic Vantage accounts, applied for two Tesco accounts and I have also opened a Nationwide and a TSB account.

    To avoid problems with multiple Credit checks, I applied for all these accounts at the same time so that the credit checks they do a) won't affect the current set of applications and b) they will all drop off my recent records together in three months or so.

    Nationwide needed me to show some ID down at my local branch, which I did after the weekend (I set up these accounts on a Friday). It's probably going to take just over a week to set up the Nationwide account all in; I am currently awaiting my account details.

    Tesco Bank take a good while to send you your documents to be signed, however you do get a few txt messages keeping you updated. And although I applied for two accounts at the same time, I have only heard back from them about one of them. They say about the second account that they are doing 'further checks' - this caution may be due to their recent hacking attack.

    BoS was a doddle setting up three accounts together, but I did have a minor hiccup. I always check my money-movement systems between stoozing accounts and my main account by sending £5 - £10 each way, before transferring the main stooz pot in. This kind of activity flags up with their fraud team as it's the sort of thing that fraudsters do, apparently, and my online account servicing was locked. A simple phone call to their fraud team unlocked everything, and the phone number to call is given to you when the 'account locked' screen comes up*.

    TSB take a while to get their stuff to you; this too may be a week or more. My pack hasn't come yet. Like with Nationwide, you're not given account access immediately although you are given your sort code and account number. Nationwide don't tell you anything initially about numbers etc. Not that I'd use the account until I have the online banking system set up anyway....

    Timing of Direct Debits (DDs) - for the first month, you might not get any interest with account requiring DDs, because your DDs may not collect in time. It all depends on whether you can change your DD sourcing over in good time, and the outcome rests entirely on the timing of your next DD collections with respect to the 'month definition' held by that particular bank. This doesn't cost any fees, as long as you are moving the right amount of money in/through your accounts, but you don't get the interest in any month when the DDs are not paid. However, if your money was just sitting in a bank account above the earnings limit, this won't be a loss, it just won't be a gain. And the interest will be paid the next month once the DDs have collected.

    My final observation is that overall the whole thing takes a week to ten days to set up, but once it's in place, and the DDs are firing properly, it should work.

    *Oh and the people at BoS knew exactly what I was doing in opening three accounts - doing it for the interest. They're not stupid ;), but of course it's all within the Rules....
  • Update on my applications in respect of my previous post.

    Nationwide still haven't finished setting things up. The account has taken ages to open and although I now have my debit card PIN and account details, I now need a 'card reader' device to enable me to set up online banking. The whole thing is a mess.

    I applied for the second Tesco account the day after the first application. My first account is up and running, but hte second account has not shown up on their radar at all. I reapplied online today and was told there was a 'problem' and could I contact them. I phoned up and eventually spoke to someone who said that, the same as my first application, they would have to do 'further checks'. So I will be waiting a few days to see if my application is successful. Not all that impressed with Nationwide, whose operators didn't seem to know about how to set up online banking, nor with Tesco who have to carry out far too many 'further checks'. But at least all the operators are friendly enough.
  • I have £50K sitting in my Santander account with only £20k gaining interest. I have read the loophole details and I am very interested to max out the return on the £30k. I have a very good credit rating and I am worried that opening multiple bank accounts will in some way effect my credit score/rating as everything including search's for car and home insurance are now listed? Any thoughts or advise? Many thanks
  • peter_333
    peter_333 Posts: 123
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    GlennP wrote: »
    I have £50K sitting in my Santander account with only £20k gaining interest. I have read the loophole details and I am very interested to max out the return on the £30k. I have a very good credit rating and I am worried that opening multiple bank accounts will in some way effect my credit score/rating as everything including search's for car and home insurance are now listed? Any thoughts or advise? Many thanks

    Opening a current account will usually trigger a credit search, which will be visible to other lenders. Opening lots of accounts in a short period may be viewed by some lenders as a sign you're desperately searching for credit.

    But I did it, and saw no adverse affects. As long as you're not planning to open new credit cards or get a card loan in the next 6 months, you should not have a problem at all.
  • peter_333 wrote: »
    Opening a current account will usually trigger a credit search, which will be visible to other lenders. Opening lots of accounts in a short period may be viewed by some lenders as a sign you're desperately searching for credit.

    But I did it, and saw no adverse affects. As long as you're not planning to open new credit cards or get a card loan in the next 6 months, you should not have a problem at all.



    Many thanks for the reply. I am new to this but fed up getting nothing back on interest. I take it that I would be best opening the accounts within a short time? Also the accounts seem to be changing regularly so I need to do a bit of work on the best combination that will give the best return. Tesco looks a good starting point with 3% on £3k and allowing 2 accounts with no pay in. Any good advice? Much appreciated.
  • peter_333
    peter_333 Posts: 123
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    Read the guide. It's got most of the advice you'd need. And don't be scared off by the minimum pay-ins. That's easily handled with a few standing orders moving between accounts on the same day. It's a bit of work to set up, but once it's done it manages itself.

    http://www.moneysavingexpert.com/savings/savings-loophole
  • peter_333
    peter_333 Posts: 123
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    And almost anything not mentioned in the guide will be covered multiple times in the 39 pages of this thread. :-D
  • peter_333 wrote: »
    And almost anything not mentioned in the guide will be covered multiple times in the 39 pages of this thread. :-D



    Perfect thanks Peter_333. I don't mind the work but its making sure I don't miss a standing order :D Much appreciated
  • teddysmum
    teddysmum Posts: 9,471
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    GlennP wrote: »
    Perfect thanks Peter_333. I don't mind the work but its making sure I don't miss a standing order :D Much appreciated
    Some of us do manual transfers with standing orders just for regular savers which require them.


    Doing this means that both I and my husband log in at least once a month (some accounts don't pay interest if you fail to log in regularly), know exactly what is there (essential if using the TSB cashback on contactless spends) and can move varying amounts, including accumulating interest, which is not getting interest due to the interest paying limit being reached.
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