Deficit Banking & multiple 0% interest account

shakey_3

My first question obviously is: is it legal for me to open multiple student accounts? If it is then it seems there is a potential to go wild with Deficit Banking and perhaps earn >£500/year with this method. An online savings account could pay >4% interest on a specific day and they don't really have any limitation as to how long the money must be in the account for, just as long as it is there when the interest is calculated and applied to the balance.

Could it be possible to have multiple student accounts with their interest free overdraft's fully withdrawn and shift these sums of money between different high interest, non-fixed savings account?

I know it's only my first post but I thought I may aswell jump in at the deep-end because i've been thinking about this for a while now

lee__48

I have three student overdrafts which I keep maxed out. The money's in my ISA earning £150 in interest a year. I've had no problems with the banks. I just BACS transfer my loan around the accounts so that it looks like I'm using the accounts.

Lee

Petree

AFAIK intrest payments aren't calculated like that, i had circa 3000 in a lloyds, on intrest day i had £3 still got £20 intrest.
The defficietted (is that a word?) money will need to remain in it for a year.
Best instant (cashpoint) access account i found was Britannia Firstsaver (sign up before 18, lasts until 21) which has just raised to 4.5%
The banks seem to get annoyed if money shifts aren't made, so take £40 from A into B on the 2nd, clear, £40 from B into C on the 10th, clear, etc.. making sure A recieves some cash back, that way the computer will not flag you as not having any transactions.

Natwest's student account says this should be the only student account, though if you send away HSBC, and Natwest forms on the same day, the box saying 'i have no other student account' will legally be correct since neither have offered you an account, credit files at 18 will be relativly blank anyhow, so both should come back with a yes and voila.
Legally it's dodgy ground, your breaking the terms and conditions of your account, and could have the account terminated with a demand for full overdraft payment within 30 days, unlikely but possible, but if you have the money in your high intrest saver you can pay their demands anyhow, i regard it similarly to the magic 17.5% discount you get from builders with cash, everyone knows about it, but it's a 'victimless' crime.

Keep one student account for student usuage, but beware the cashpoint balance screen, my friend opened one with £100, it said available £1600 (overdraft money) and she got a tad excited..... , would suggest you keep one lightly filled, and use a normal account for transactions, that way you can see your real balance, and it has an end when your drunk and standing at a cashpoint and think you have just pressed the £250 button, when you meant £20, it will say 'no money!', not 'quick drink your whole overdraft while getting mugged'

To keep all accounts active, plan you need say £40 for shopping, take a tenner out of each (when there is not a big que!!!), and this will mean it's not only standing orders running through, which begin to look a bit odd after a few months since your terms will say it needs to be a proper account etc...

hth
petree

fragster

i've done this a little, nowhere near £500 a year dont wanna kill my credit rating totally, i do think more than 1 student account doesnt do it much good, however i decided it was worth it for the money i will be getting and the fact that i already have 3 CCs so wont need any more in the forseeable future...

got 3 student accounts here, only had trouble with RBOS because i completely maxed the OD and left it empty for 2 months because they annoyed me, they sent me a letter saying phone them to discuss the account, i didnt bother, just paid in a few hundred and did a few small transactions, havent heard from them since.

Anyway i have just over 3 grand of which 2,500 is various banks money on interest free ODs in a mini cash ISA, getting me around £150 a year i think, also have a rotating DD set up transferring £20 a month between all 3 accounts, i still try and use all of them a little bit, one gets used a ton though as my main account. hope thats of some use

zcaprd7

Yes - have as many as you can muster (especially Smile) - but you have to keep them happy.


Cascade a £25-50 standing order around all of them, should stop their automated systems from picking you up.

And if any get lairy, because you have several accounts, you can tell them to F off - I had much amusement doing this to Barclays - the jobsworth who loved to talked down to (and perv up the female) students because of his positon of power was most displeased at my shouting....

shakey_3

Ok, well im going to investigate which of the major banks offer the highest 0% overdrafts (im going into my 4th year at university) and how many instant access, high interest rate accounts are available.

I will report back by the end of the week

zcaprd7

If you're in your fourth year have a look at HSBC - they offer a zero deposit mortgage to graduates (for up to 5 years I think) - which could be handy.

johnllew

I have three student overdrafts which I keep maxed out.

Presumably this was allowed? Which banks were they? My son will need to research this shortly. All advice gratefully received.

got 3 student accounts here, only had trouble with RBOS

Which were the other two banks?

lee__48

Presumably this was allowed? Which banks were they? My son will need to research this shortly. All advice gratefully received.

I've got accounts with NatWest, Lloyds TSB and Smile. I think the key to keeping a maxed out overdraft is to make sure you pay some money in regularly ie. your student loan or set up automated payments to shift £20 around every week/month.

Lee

zcaprd7

Yes that's the way - they just need to 'see' (automated I'm sure) activity on the account...


It would be annoying to have a £1500 overdraft suddenly closed and they ask for their money back (which they can do at any time).

Smile were the best - I just wrote a £1950 cheque out to my main account a forgot about them - it stayed 0% until a year after graduation at which point I paid it back.

HSBC are good (generally) don't hassle students, a bit more understanding with things like temporary overdrafts etc - avoid the campus branches if you can - they're geered up to ignore the sob stories.  Go for a local branch.

fragster

Which were the other two banks?

the other banks that i have accounts with are HSBC and Natwest, both of these have been great, recommend em, HSBC has the best internet banking i have used by a long way though!

from the advice i have read i think i might set up a smile account too, they sound good