Current Account Manipulation

Daroon87

I have a question - there's probably some reason why this can't be done but I can't find any reason why not and I can't see this mentioned in any other threads (sorry if I'm posting in the wrong place!).

For current accounts where you get a good interest rate but have to pay in "your wages" eg £1000 a month, is there anything stopping you from having your wages paid into a different bank and then just transferring say £1000 from there into the new account and then the next day transferring it back out?

So say there were 3 current accounts with high interest rates but all required £1000 a month to be deposited, could you have your wages paid into account A, then transfer £1000 to account B, then the next day transfer it again to account C and then finally back to account A the following day? So just by moving the money in a loop you effectively get 3 high interest savings accounts.

To that end, on a similar note, some of these accounts require you to "switch current accounts" to get the high interest rate (or offer incentives for using their switching service), but as I understand it what that usually means is you need to use their switching service to transfer (eg) 2 standing orders from another current account which they then close on your behalf and then you need to pay in eg £1000 a month.

So - in theory could you open a "dummy" current account with a separate bank and set up two standing orders, say just paying £10 a year to yourself at an account you already have, and then use their switching service on this dummy account to gain access the account with the desirable rate and then used the above detailed method to transfer in the £1000 a month and straight back out again?

I can't be the first person to have thought of this but I can't find any info on why this would or would not work. Please advise! :-)

212

Moving 1k around works as long as it's from outside the bank. Internal transfers normally don't count. If they bother to look in detail they can see it's not 'wages', but normally the fact you've had a £1000 BACS credit is enough to automatically qualify. I've done it for at least 3 years now with at least 2 that demand 'wages' and neither have said anything. I cycle the money from 1 account to the next all on the same day (to all of my accounts as well, just incase!)

Re: opening dummy accounts. As long as the dummy account you pick would meet the criteria. So if it's 2 SOs and a D/D then it must have those setup before the 'switch'.

I did it a few years back when Halifax only wanted 2 Standing Orders. Both were to myself on my birthday each year for £1. They went out in 2011. Forgot to cancel them in 2012, and ironically, days after I'd taken the overdraft off the account, they were returned so got whacked with a £20 charge! Was going to go for a goodwill refund but don't want my accounts looked into in any detail so left it! More than made it back from them in the past (and will do in future!), just make sure you're careful! Especially if the direct debits are genuine bills/credit cards etc and could actually be taken on a monthly basis

dalesrider

You do not have to let the gaining bank close the old account.

Plenty of posts on this very subject.

innovate

Daroon87 wrote: »

I can't be the first person to have thought of this but I can't find any info on why this would or would not work. Please advise! :-)
[/FONT]

You are right, you are not the first person who thought of this. You are also not the first person who doesn't make an effort to find existing posts on the subject. But if you did, you would find a lot about it on this Forum. You'd even find some bits on the main MSE site.

innovate

212 wrote: »

Moving 1k around works as long as it's from outside the bank. Internal transfers normally don't count.

Not necessarily so. Depends on the bank.

innovate

212 wrote: »

Especially if the direct debits are genuine bills/credit cards etc and could actually be taken on a monthly basis

You are heading for disappointment if your DDs are not actually paying monthly. But all that is in the bank's T&Cs and has been talked over in the respective threads.

CRISPIANNE3

innovate wrote: »

You are heading for disappointment if your DDs are not actually paying monthly. But all that is in the bank's T&Cs and has been talked over in the respective threads.

N

i have Lloyds with the Vantage add on and provided two dd are active and I fund the account each month with £1000 then I get my usual 4 percent interest.

There is nothing in their terms and conditions to say the dd has to be paid monthly.

innovate

CRISPIANNE3 wrote: »

N

i have Lloyds with the Vantage add on and provided two dd are active and I fund the account each month with £1000 then I get my usual 4 percent interest.

There is nothing in their terms and conditions to say the dd has to be paid monthly.

You are talking about Lloyds. You are sort of right, though there is nothing in the Lloyds T&Cs about the DD's having to be "active".

The OP and I were talking about Halifax.

Different banks have different T&Cs.

Vortigern

Daroon87 wrote: »

I can't be the first person to have thought of this but I can't find any info on why this would or would not work. Please advise! :-)

Hi Daroon and welcome to the forum! You're not the first person to have thought of this but never mind. If you can come up with a similar money-maker please post the details on the forum and we'll give it some consideration.

You'll find most of the earlier posts on this subject on the "Savings and Investments" board rather than this one. Look for threads about Halifax Rewards, Lloyds Vantage, Santander 123, Nationwide FlexAnything and one about savings accounts which can be funded by direct debit.

Carrie_bie

I've been searching around the forum for the last three hours trying to find some more information on this topic, so thank you Daroon for asking this (and getting told off for it instead of me )!!

Can anyone give me tips on what to search for, or look out for, when trying to find these posts that Innovate is talking about? Is there an official term for recycling your money in this way?

Thank you muchly

oldagetraveller

"You'll find most of the earlier posts on this subject on the "Savings and Investments" board rather than this one."
Which I found very odd considering that the LTSB Vantage is a current account!;)
So I wonder why the OP didn't look there?:)