Halifax Reward

LongTermLurker

Mikeyorks wrote: »

This account, and it's subsequent offspring, changes quite a few things .... so it does need people to work out what fits their circumstances.

When the High Interest account was 6% .... I always kept a balance between £2k - £2.5k. Then they reduced the interest to 5% .... and I reduced my average figure to £1k - £1.5k ...... as I could keep the residue elsewhere and at a better rate.

Now the interest has halved ..... I run the current account on an average £400 (agreed o/d but which I never use) .... and top it up occasionally as DDs etc come out. So the £75pa (gross) they will credit me with ..... means they have effectively moved my interest rate up to 18.75% gross. And I could move it higher by running a lower average balance.

It's a bit meaningless really .. as there's nowhere really 'interesting' to put the top up cash that I need to keep alongside. But it will still make it my best paying account in pure interest terms .... until a bit of sanity returns to money in general.

Well I put most spending on credit cards (one-bill-wonder ) so cash is only for beer and sarnies, etc, thus with most DDs going out a few days after pay goes in, I manually sweep all bar hundred and odd quid into savings accounts (of which I have several choices over 6% atm). So apart from the money destined for my credit card and the reducing beer-balance, there's never much in my Halifax account these days. Like you, when it was worth it, it was worth leaving a decent amount there but now it's worth getting as close to 50p as possible - maybe we could start a new group: "How low can you go?"

LongTermLurker

rb10 wrote: »

The rule is normally one in your single name and one in joint names. E.g., the High Interest T&Cs say (Special Condition b):



I'd imagine they'd impose the same restriction on the Reward Account.

BUT, I don't know if the Bank of Scotland Reward Account counts as a different product, so I guess you may be able to potentially have 4 (2 Halifax & 2 BOS). Hmmm, that gives £300 gross per year...

"Is this the day stoozing re-invented itself?" :cool:

LongTermLurker

YorkshireBoy wrote: »

5 (pounds per month) x 12 (months) x 4 (accounts) = £240 (net).

ah yes - the quoted £75 was gross then

I blame Mike for confusing me with the £75 bit...

Jaybee24uk

This explaines why I've been offered a £2k overdraft out of the blue 6 months ago.

As I'm getting married, I lving off it, so this extra charge will hit us hard!

Mikeyorks

YorkshireBoy wrote: »

Is there a limit to the number of Halifax current accounts one can hold...either in sole or joint names? You can guess where I'm going with this one.

Sorry, been missing on 'Exor' duties.

I guess post #58 is the correct answer. Except that if you can go to 'joint' accounts then you can normally align 2 x singleton accounts alongside? Making 3 accounts per unit of each type they decide to float this 'free' interest against?

Mikeyorks

LongTermLurker wrote: »

but now it's worth getting as close to 50p as possible

If you can keep that as the average - it's 15000% (gross!!!) Not bad.

Unfortunately it's still only the same £75 as my 18% !!

I blame Mike for confusing me with the £75 bit

...... that's OK I've been grossly blamed all day at this end as well!

Mikeyorks

YorkshireBoy wrote: »

I wasn't going to feed them 'internally', for fear of drawing attention! .

...... you're not usually that nervous

YorkshireBoy wrote: »

After all, we should have FP's fully in place by then.

........ or that optimistic!

heppy23

As someone with an overdraft that will put me on the £2 per day bracket I will be worse off I think.

When an OD is interest based then you have the obvious incentive of paying less interest based on paying money in, like when you are snowballing credit cards and paying off the highest ones first and seeing the interest drop each month.

With this new structure I am not better off if my balance is -£2501 or within a pound of my OD limit.

Yes it will encourage me to stay within the OD limit but it doesn't incentivise me to pay it off any other way (apart from the long haul to get it under £2500 to pay £1 per day then the next long haul to get it to zero).

The only thing it does make me want to do is pay it off sooner rather than later so I suppose it does work!

opinions4u

heppy23 wrote: »

As someone with an overdraft that will put me on the £2 per day bracket I will be worse off I think.

When an OD is interest based then you have the obvious incentive of paying less interest based on paying money in, like when you are snowballing credit cards and paying off the highest ones first and seeing the interest drop each month.

With this new structure I am not better off if my balance is -£2501 or within a pound of my OD limit.

Yes it will encourage me to stay within the OD limit but it doesn't incentivise me to pay it off any other way (apart from the long haul to get it under £2500 to pay £1 per day then the next long haul to get it to zero).

The only thing it does make me want to do is pay it off sooner rather than later so I suppose it does work!

Typical overdraft rates for Halifax are 15.9% and 19.5%.

If you are £5,000 overdrawn, you will pay just short of £800 or £1,000 a year in interest at the moment. £2 a day fee will cost £730 a year - some will be better off. If you re funding the account with £1000 a month, you can knock a further £60 off this.

For a £3k overdraft the interest will be up to £480 or £600 at the moment and will rise to £730 as a daily fee - assuming you are overdrawn every single day!

As with everything, there will be some winners and some losers.

YorkshireBoy

opinions4u wrote: »

Typical overdraft rates for Halifax are 15.9% and 19.5%.

If you are £5,000 overdrawn, you will pay just short of £800 or £1,000 a year in interest at the moment.

At it's extreme, yes, but I would have thought most people with a £5,000 overdraft facility in use would be crediting a decent amount in salary(ies) each month...say £3,000 to £3,500?

The average overdraft in use would therefore be £3,250 to £3,500 (and less if the household bills and credit card payments etc went out at the end of the month just before payday), which could bring your debit interest figure down to around £500 per year...or a good bit less?

All of which means the new charging structure is at least 50% more expensive in this particular (hypothetical) situation.

And we mustn't forget, a large number of customers with the Moneyback account currently enjoy a very good 6.9% EAR on their debit balances.