Theoretical Lloyds Current Account (Ab)Use

Afahmaep

Let us say I have got a Lloyds Current Account with a £1000 Overdraft.
I also happen to have 5 other Current Accounts from totally separate High Street organisations all with their own Chequebooks.
If I were to write myself 5 cheques of £200 each (one from each of the other organisations) and deposit them on Saturday into my Lloyds Account, I should in theory earn interest from Lloyds over the weekend as they pay interest from the day of the deposit but not be debitted from the other accounts until the cheques show up (Monday at the earliest).
I should therefore be paid twice for MY money for 2 days at least.
Let us also bring into the equation my Lloyds cash card.
Suppose I was to withdraw £200 per day from Monday onwards from the Lloyds account and deposit £200 back in cash into each of the other 5 accounts (all High Street names), one per day, until all the money was back where it started from by Friday.
Would I be charged interest on my Lloyds Account even though the money was there but not available. i.e. Can you draw against uncleared funds using your overdraft and not be penalised. This is the crucial part of my question. If this isn't so then my theoretical plan doesn't work.
If so my calculations show a profit of £1000 x 52 x 7/2 x (a + b) where 'a' is the Lloyds current account Rate of Interest and 'b' the average Rate of Interest of the other High Street Banks. NB Most of these High Street organisations have instant transfers from online savers to Current Accounts.
If a + b total 3% then the profit is £445.72 p.a. for 2 days double interest (£8.57 per week)

If a + b total 4% then the profit is £594.29 p.a. for 2 days double interest (£11.43 per week)

If a + b total 3% then the profit is £222.86 p.a. for 1 days double interest (£4.29 per week)

If a + b total 3% then the profit is £297.15 p.a. for 1 days double interest (£5.71 per week)

lynxptc

The things some people will do for money!

buses7675

Hi All,

I do this also when transfering money from A&L to Lloyds TSB (although only usually once a month) and I always aim to do it on Friday in order to get the extra weekend of 'free' double interest!

Best 'bonus' I got out of this scheme was a cheque for £1000 which I paid myself from A&L to Lloyds TSB over Christmas, thus getting four days extra, as there was the weekend, then Christmas and Boxing Day Bank Holidays!

Cheers

Steve

jonesMUFCforever

Saturday is a non working day and the work will be dated Monday even though LTSB use a live online banking system.
So IMO it will not work because the interest that you will get on the cheques will not start until Monday.
The cheques that you deposit on a Saturday(Monday) will not show up as available for you to use until Friday morning.
To me this sounds pointless as you will be making pennies but you will wear out quite a few pairs of shoes!

ffacoffipawb

Afahmaep wrote:

Let us say I have got a Lloyds Current Account with a £1000 Overdraft.
I also happen to have 5 other Current Accounts from totally separate High Street organisations all with their own Chequebooks.
If I were to write myself 5 cheques of £200 each (one from each of the other organisations) and deposit them on Saturday into my Lloyds Account, I should in theory earn interest from Lloyds over the weekend as they pay interest from the day of the deposit but not be debitted from the other accounts until the cheques show up (Monday at the earliest).
I should therefore be paid twice for MY money for 2 days at least.
Let us also bring into the equation my Lloyds cash card.
Suppose I was to withdraw £200 per day from Monday onwards from the Lloyds account and deposit £200 back in cash into each of the other 5 accounts (all High Street names), one per day, until all the money was back where it started from by Friday.
Would I be charged interest on my Lloyds Account even though the money was there but not available. i.e. Can you draw against uncleared funds using your overdraft and not be penalised. This is the crucial part of my question. If this isn't so then my theoretical plan doesn't work.
If so my calculations show a profit of £1000 x 52 x 7/2 x (a + b) where 'a' is the Lloyds current account Rate of Interest and 'b' the average Rate of Interest of the other High Street Banks. NB Most of these High Street organisations have instant transfers from online savers to Current Accounts.
If a + b total 3% then the profit is £445.72 p.a. for 2 days double interest (£8.57 per week)

If a + b total 4% then the profit is £594.29 p.a. for 2 days double interest (£11.43 per week)

If a + b total 3% then the profit is £222.86 p.a. for 1 days double interest (£4.29 per week)

If a + b total 3% then the profit is £297.15 p.a. for 1 days double interest (£5.71 per week)

You would be getting "b" anyway by doing nothing so that needs to be removed from the equation for a start.

Every week therefore yields a profit, before tax, of (assuming 2 days double interest):-

£1,000 * a * 2/365

If a = 5% (which for Lloyds TSB it most certainly won't be) this gives 27p gross.

Your numbers make no sense at all - are you Gordon Brown?

You would probably lose more than this when sending it back from whence it came, as your money would be in limbo for the one day before clearing (it earns no interest on day of receipt, and probably no interest on day of withdrawal too).

I suspect the likely profit is negative.

mrmajika

:rotfl: :rotfl: :rotfl: :rotfl: :rotfl: :rotfl: :rotfl:

10 out of 10 for effort though:T