Possible Cahoot loophole 27 July 2004 at 5:01PM in Savings & Investments 16 replies 2.3K views

joe.marshall_2

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

System

Nice one Joe

lswwong

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

alared

£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

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

alared

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

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

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

quinlanmd

???

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

johnllew

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.