Lump sum for bonus interest payment

sishort

Hi all,

Hope I can get a few opinions from the collective wisdom here.

I have a savings account which is due to pay a bonus interest rate of 6% in November. I have spoken to the bank in question (Halifax) to check the details and it is as I suspected that there are no restrictions on how much I can put into the account and the funds only need to be in there on the day that the bonus interest rate is paid for it to qualify.

Can anyone see any down sides to me begging, (not stealing) and borrowing as much money as I can for a couple of days around the bonus payment day and claiming 6% interest on it?

Other than potential higher tax bills, it seems like a no brainer, but as most things in life that seem too good to be true usually are, I thought I'd see if anyone else could see problems.

Would really welcome some help here. Thanks

Baldur

The bonus will be paid on the daily balance of cleared funds in the account, so unless you pay a VERY large amount into it, you are unlikely to become rich between now and November, e.g. £5,000 paid into the account today would earn you around an extra £24.35 gross in one month's time (£19.50 ish after basic rate tax).

rb10

sishort wrote: »

I have a savings account which is due to pay a bonus interest rate of 6% in November. I have spoken to the bank in question (Halifax) to check the details and it is as I suspected that there are no restrictions on how much I can put into the account and the funds only need to be in there on the day that the bonus interest rate is paid for it to qualify.

The bit in bold is incorrect.

It's not a 'bonus' interest rate of 6%. The way the Guaranteed Saver Reward works is that for each month that you pay £1000 into your current account, the interest paid is 6% AER. The interest is worked out on the daily balance of the account, right throughout the year, and is paid on the anniversary of the first deposit.

So if you have £50k in the account on the day that interest is paid, but £5k for the rest of the year, you will earn:
£5000*6%*(364/365) [for 364 days @ 6%] + £50000*6%*(1/365) [for 1 day @ 6%]

However, you are correct to say that there are no restrictions on the money that you put into this account, so although you are nearing the end of your year, it's still worth putting what you can into this account as soon as you can, so that you get a higher number of days with a larger balance, and so therefore more interest.

sishort

Thanks guys. That makes a lot of sense.

I knew I could rely on you all.