Savings accounts strategy (transfers, closures...)?

Sparkly

How do you manage your multiple savings accounts?

After being a bit lazy opening accounts and not transferring to get the best rates, I've had a clear-out and down to 3 accounts. Some accounts don't seem to allow payments direct to other savings accounts, so I have to go via my current account - extra lost interest. I transfer via BACS but have used DD depending on the account. Never used CHAPS due to cost, but is there any benefit to using it?. I also worry about cash going missing, so when I set up transfers I run a few quid though, then test it again just before transferring larger amounts. The rules on an accounts vary a lot, so I even made a diagram to show working transfers, rules & rates!

I know some people here manage lots of accounts and move fast to get the best rates, so I'm after a few hints and tips, or 'hacks' as they're trendily called now.

Heinz

I too do 'test' BACS transfers before moving large amounts to new accounts.

I don't think I've got any tips for you but I'll just mention that I always do a rough calculation of the benefit of moving money before doing so or opening a new account. For example, moving £10k from an account paying 4.75% gross to one paying 5% gross only makes an additional £20 or £15 (depending on your tax rate) per annum so, before doing anything, I simply ask myself, is it worth the hassle of yet another account, logon ID, password, security questions, money laundering procedures etc.

oldfella

always move money on a Monday - arrives at your bank on Weds, at new destination on Friday earning interest over the weekend

if moving around £100K+ use CHAPS

Mike

Sparkly

Sounds sensible not to chase small rate changes, and start transfers on Monday (except next Monday ). Some useful points - thanks.

I'm going to get down to one savings account (YBS Internet saver) and then tackle the 3 current accounts I have!

Stonk

I find it worth spreading savings among multiple accounts. If you have more than £35K, the main reason for doing so is the FSCS compensation limits. But even if not, then it reduces your exposure to the effects of one institution suddenly unilaterally reducing its interest rate (or not passing on an interest rate rise).

steady__eddie

If an account no longer earns its keep by paying a decent rate, I always keep £100 in it because firstly, it may be beneficial in the long run (certain institutions only) and secondly if it becomes flavour of the month again later on, the rigmarole of providing I.D. to open another account is dispensed with.
A case in point which highlights the second point is the Derbyshire Regular Saver. As soon as they dropped their rate dramatically, my monthly payments shrank to a tenner a month.

Heinz

steady__eddie wrote:

If an account no longer earns its keep by paying a decent rate, I always keep £100 in it ........

I leave £1.01 - but perhaps I'm just too tight!

steady__eddie

Heinz wrote:

I leave £1.01 - but perhaps I'm just too tight!

If you had have done that with a Lambeth account then you wouldn't be receiving a cheque for three hundred and twenty quid at the end of September !

it may be beneficial in the long run (certain institutions only)

I wouldn't suggest that you were too tight, merely a little unwise ?

edda

If the transfer is done for you (e.g. for ISAs), always check that you have received interest for the full period from one of the 2 organisations. (Except maybe the transfer day itself).

I found that some of the banks and b. socs receive the money but don't credit interest until they process it into your account. This can be days - or weeks.

If they get it wrong - claim the extra interest politely.