Alliance&Leicester overdraft

makdawid

Hi,

I opened a Premier Direct Account with A&L to keep £2500 on it and get 8.50% AER as promised. Obviously I don't forget to pay into it £500 every month which I almost immediately withdraw and place somewhere else.

However, I thought I could also use £300 overdraft with "no interest or usage fees on arranged overdrafts for the first 12 months from when you open the account".

My idea was: every month go to A&L branch, withdraw £2800, stuck £300 into some saving account or anything else, next day pay £2500 back into my bank account not to lose above-mentioned 8.50% and voila!

Of course after 10-12 months I would pay overdraft back but keep what I've earned...

Is it a good idea or completely stupid?
And if yes, where is the best place to put this 300 quid?

Thanks for your help, sorry if I sound naive, still learning! :beer:

pmorrison_2

But surely if you do this you will just have £2200 in there and that will negate the overdraft? You cant use the overdraft and the balance, they arent separate entities.

makdawid

Right, that was stupid then... very stupid actually. I feel embarassed now. Thanks anyway!

pmorrison_2

The only way to make a profit from it would be to withdraw the £300 and keep the balance at -£300 and put that in another account, but the interest on that would be so minimal it wouldnt be worth it! May as well just make use of the 8.5% interest!