Using or Abusing HSBC

smudgie2

Would appreciate any comments on my current thoughts following the drop in rates on both Cahoot savings accounts.
Have the max 50K in the earlier bonus account now dropping from 5% and 30K in the six and three month bonus account both of which drop to 4.55% on 28.4.06.
My intention is to pull all the money out following the Easter break. I keep a sharp eye out for one year fixed rate bonds and currently look for 5% +.
So the scenario is....
I bank with HSBC but keep nothing with them using them as a checking account!
Have opened a First Direct acc at 5% and am aware of the interest penalty when withdrawing money and the need to take the total amount on the 1st of the month.
If, as planned I move all of the Cahoot money back to HSBC current account, taking approx 3 working days, would look to put 30/50K into Coventry 1 year bond at 5.10% if it is still available. So that leaves the remainder which can transfer to First Direct. The advantage to me is that any transfers between HSBC and first Direct are instant, so no 3/4 day delay.
Should an attractive 1 yr bond appear on the market or a savings account I can on the first of the month withdraw the total amount instantly from FD to HSBC current and go shopping for the best deal! However if not placing all of the FD monies my question to myself is where do I hold the remaining balance until the next month when it can be returned to FD and the month with loss of interest is finished.
My thoughts are to open an online saver with HSBC at 4.75% which also has instant transfer facility as a holding account for 1 month before transferring back to First Direct at 5%.
Example:
Day 1 (first of calender month) withdraw 50K from First Direct immediate transfer into HSBC current account. Purchase, say, 1 year bond for 30K.
Transfer remaining 20K to HSBC online saver, again immediate, as a holding account at 4.75%. until the first of the following month when it can be transferred back to FD. Am aware that HSBC online saver requires a minimum of £500 balance.
Does this make sense or am I missing a trick. I do not intend to frequently move money to and from First Direct as it negates the benefit of 5% in lost interest BUT should I choose to in order to secure a good savings deal elsewhere I feel I can limit the damage on making a total withdrawal of the monies.
All thoughts welcome and appreciated.

Smudgie2

smudgie2

Apologies as title of thread should read Using and Abusing !
Also aware of the same withdrawal penalty with HSBC online saver but as they pay interest on the 1st of the month as First Direct feel they ought to work in conjuction.
Smudgie2

Zwicky

smudgie2 wrote:

Would appreciate any comments on my current thoughts following the drop in rates on both Cahoot savings accounts.
Have the max 50K in the earlier bonus account now dropping from 5% and 30K in the six and three month bonus account both of which drop to 4.55% on 28.4.06.
Smudgie2

I think you are mistaken about the Bonus Savings Account. This account guarantees a .75% bonus for twelve months from opening then .25% for 3 months so unless you opened it 9 months ago (recall it was only available from Sept 2005) it will not be 4.55% from April 28. If you are still in the initial bonus period it pays 5.25% (or 5.15% monthly int) and you can put up to £100,000 in it so why not transfer all your Cahoot funds to this account? Transfer is instant.

smudgie2

Thanks for your comments Zwicky.
Have checked and doubled checked by logging into Cahoot and the interest rates given for the Bonus Savings Account available from Sept 2005 (which is the one I had) paying 5.2% annually are.

*Gross rates include a 0.75% gross bonus payable for the first six months from opening. This will be followed by a bonus of 0.25% gross payable for the next three months.

My original post was incorrect in that I no longer have 30K in this account.
As it was opened in Sept 2005 the 0.75% bonus ended with the rate changing to 4.75% (dropped 0.75% then increased by 0.25%) at the beginning of March I opened the non introductory savings account at 4.85% and moved everything bar £5 into this new account to earn the additional 0.10%.

Of course the rest is now history and Cahoot stole a march on the best laid plans of mice and men !!! Have now received 2 emails and secure messages confirming that both of the accounts I now hold are reducing to 4.55% on 28/4/06.

Have now closed the account with £5 remaining and received confirmation back from Cahoot that the closure is in process and the interest owing will be paid by cheque.

So Zwicky am waiting for Tueday to arrive so I can get my money on the move out of Cahoot. Only hoping that it will arrive in time for me to take up the fixed rate 1 year with Coventry.

Cheers

Smudgie2

Zwicky

Sorry, you are right the .75% bonus is for 6 months not 12 as I said in my previous message but although it's probably irrelevant to you now, I don't see how Cahoot can reduce your account to 4.55% as it should stay at 4.75% until the end of May. My partner has the bonus savings account and has not received any messages from Cahoot about a reduction to 4.55%. It was opened in January and should therefore pay the 5.15% (monthly interest) until June.

If you don't manage to secure the Coventry account try Birmigham Midshires ( https://www.askbm.co.uk ) 4.90% including a twelve month bonus of .60%. It's likley to drop soon as it's part of Halifax but you can open now and fund later.

smudgie2

Hi Zwicky,

Thanks for your reply although we do seem to be bouncing back and forth with endless confusion about which accounts are which, so to clarify -

I now hold, and only until tomorrow, my original account available from Sept 2004, starting at 5.65%, dropping to 5.30% and now down to 5.00%.
And the other is the more recent 4.85% account which did not include any bonuses. Both of these accounts are the ones I have received communications on from Cahoot.

Agree with you that the one you are referring to which started at 5.15% including the two bonus periods does not appear to have been touched by Cahoot, would suspect because at the end of the total 9 month bonus period it will itself drop to 4.50%.

Lets hope we both agree on all this ! Thanks for the tip on Midshires will let you know if I can secure the Coventry 1 year bond.

Thanks and all the best

Smudgie2

Milarky

Your suggestion to use HSBC online saver and FD e-saving in 'piggyback' was my thought also. (Did not come across this thread earlier.) Hopefully that would work and -if you apply to open the HSBC account before the end of today from scratch- they will give £20 as well.

http://www.hsbc.co.uk/1/PA_1_4_24P/content/uk/pdfs/en/easter_offer.pdf

smudgie2

Thanks for your comments Milarky. The £20 Easter offer is and added bonus.
Good to hear that I am not alone in my thoughts as was thinking maybe I was just a 'Baldrick' rather than hatching a cunning plan.