Second Current Account for Billing / Recurring Payments

Mangotastic

I'm a recent graduate with a Graduate Bank Account from HSBC. I've followed a lot of the advice on this website for budgeting yourself but I find myself getting a little overwhelmed trying to track and budget regular payments especially when they're taken out annually.

I was thinking about opening a second bank account to which I would transfer a set sum each month that is representative of my entire years recurring bills spending split monthly. I could then just point my direct debits for my bills to that account and use whatever is left in my main account for food and general purchases (as well as transferring 10% to my Savings Account).

Is this a common practice, can you open multiple current accounts with HSBC or other banks or is this frowned upon?

I have a basic easy access savings account I could do this with too (and get interest when it sits there waiting to be taken out) but I was a little worried that banks wouldn't like direct debits coming out of as savings account. Is this a better option?

Any advice you could give or any links/guides you could point me toward are much appreciated.

Lokolo

I have my main account with HSBC and my bills account with Lloyds.

MoneySaverLog

I have 3 classic vantage accounts with Lloyds, and an incentive saver. 1 account is for the bills, a second for my personal spending and a third one for savings, but not really using that one at the moment.

And cause they are vantage accounts you can set up dd's and so's from all 3. Plus the option of floating a £1,000 a month between them all to get interest on all the vantage accounts.

Get the free £5 from Halifax by floating the same £1,000 through that every month too if you're not already doing that ;-)

hermante

Mangotastic wrote: »

Is this a common practice, can you open multiple current accounts with HSBC or other banks or is this frowned upon?

Well it's "frowned upon" in that all banks want you to exclusively bank with them only. Actually, to me HSBC is the only exception to that, they have never even asked about what other accounts I have and were very helpful when I had problems sending money from HSBC to other accounts!

However you can do what you like with your own money, and it's always good to have several accounts in case you need a branch or one bank freezes your accounts. I also recommend the Halifax reward account, the free fiver is really a no-brainer for anyone who wants a secondary account.

MoneySaverLog

hermante wrote: »

Well it's "frowned upon" in that all banks want you to exclusively bank with them only.

Well the banks do you no favours, you take care of yourself and put your money where it will do the most good for you :T

premierfella

Some good advice above.

Personally, I would choose to open the second account at a different bank to where the main current account is. Advantages include those already stated (i.e. better accounts, account frozen), similarly if your main bank suddenly refreshes their account range such that the account no longer suits you an account already elsewhere might be a plus.

For a bills account which you are paying direct debits out of I would also probably seek out one of the few accounts with a no-fee, interest free overdraft buffer as well (assuming you would credit score for an overdraft).

heloid

I have 2 current accounts with HSBC so they will do it for you.

But to be honest you should be looking at 5% account from santander and account opening bonus, same with First Direct and 8% regular saver, Halifax £5 reward account, Lloyds Vantage account with 3% above £3k.

Just make SURE you have your bills and pay going to an account of a bank you TRUST/have a good relationship with. I use First Direct for this as I know if I ever have problems they will help me. Use the alternative account for spending, keep a low balance so if you lose your card/get robbed your card for your main bank/high balance is safe in your house and available in emergencies etc