new bank account with overdraft to pay insurance

web-kix

Hi there, first post so be gentle.

I am a graduate, finished uni may 2010, currently have a HSBC advantage account, I was told the overdraft remained the same, then got hit with charges, dont you love banks.

anyhows, Ive reduced the overdraft down to 1500 on my hsbc account. Bought a house last december and havent been able to pay much off since.

My car insurance is due next week, best quote of 892, pay monthly 1332, so i plan to either get a 0& credit card to pay off in one, or the next options...

I read today the RBS account is good with graduate accounts, 0% upto £1500 overdraft. my plan is to get this account and pay my insurance off, then place the remaining £600 in my hsbc account, this will make my hsbc overdraft £900 instead off £1600 meaning i pay less interest. I will set up a direct monthly payment of £110 per month to the RBS account, meaning after 12 months the overdraft will be £180, I will pay this off over the year so it is £0

I know it seems a bit long winded, but I will save £430ish on my insurance allowing me to pay £430 off the overdraft instead.

will i get the rbs account with my current overdraft? i only have my HSBC account and a natwest, joint with my girlfriend, which we pay household bills to, no overdraft, in credit but its the 'incase fund'

any suggestions welcomed

casper_g

On the one hand, this idea looks like it will save you money over the year compared to opting for monthly payments from your insurer. On the other hand, it is a bit worrying that you need to resort to getting a new bank account with overdraft in order to pay for car insurance, which is an expected regular expense. Take a careful look at your finances, and reduce your outgoings to ensure you have some scope to build up some savings. As a home owner you need to have a cushion to deal with sudden unexpected expenses (new boiler, etc).