Losing Overdraft Facility

HowieB17

hi all, first ever post so be kind!
I have a Santander 123 account, with overdraft (that i ALWAYS use). A relative wants me to 'give' me money to put into this, as it has a great savings rate (3%AER). However, i am concerned that if i dont use/go into my overdraft monthly anymore, that it may be automatically withdrawn.
if it was, when my relative wants the cash back i will be in effect out of pocket, as i rely on part of my O/D to live on each month. cheers all!

Gizmo247

Your overdraft is probably more likely to be withdrawn if you are using it all the time and Santander get wind of something they don't like in your credit files.

If the other party is a tax payer then you and they are probably committing tax fraud.

If it also unwise to hold money for someone else and the non-typical nature of the money source could trigger a money laundering block on your account.

My advice - don't do it but focus of trying to not use your OD in the first place.

JuicyJesus

Gizmo247 wrote: »

Your overdraft is probably more likely to be withdrawn if you are using it all the time and Santander get wind of something they don't like it your credit files.

...

My advice - don't do it but focus of trying to not use your OD in the first place.

I'd say not to do it for different reasons. With increased capital requirements, banks do not like having large facilities granted to customers which are not used, since the capital to fund them could be used more profitably elsewhere (i.e. customers who DO use the facility). So there's a chance it could be withdrawn even if you don't use it.

There's also another, slimmer chance that as soon as the account is in credit, Santander will just remove the facility in an attempt to stop you going overdrawn again, particularly if you've been constantly overdrawn for a long time. Unlikely, almost vanishingly so, but possible.

However, you really should focus on getting out of the OD. Having all of your regular outgoings reliant on one is a house of cards that can collapse extremely quickly and with awful results.

R_P_W

Why can't they jus open their own 123 account?

YorkshireBoy

R_P_W wrote: »

Why can't they jus open their own 123 account?

Long shot...they'd have to declare it if/when asked by the authorities.

In the same vein, the OP would have to declare the £3K+ (required for 3%) if asked the same question.

Apologies to the OP and their family if neither of the above apply.

CLAPTON

OD can be withdrawn at any time

have you considered what you would do if they withdrew it from you?

Archi_Bald

JuicyJesus wrote: »

However, you really should focus on getting out of the OD. Having all of your regular outgoings reliant on one is a house of cards that can collapse extremely quickly and with awful results.

I agree. The OP should also be aware that all overdrafts can be recalled at any point in time with little or no notice.

HowieB17

thank you all. Some replies: relative is elderly and infirm, she has just had a stroke and cannot speak (so the cash is paying for her care in effect). When she recovers enough to handle her own finances then she will of course explore other avenues for these savings. But at the present she is earning 0 interest, and needs our help in accessing the money. Im a bit worried now tho, didnt consider a) tax implications and b) removal of OD with no notice. WOULD I get no notice?? thanks again

mgdavid

HowieB17 wrote: »

....... Im a bit worried now tho, didnt consider a) tax implications and b) removal of OD with no notice. WOULD I get no notice?? thanks again

yes, no notice is all too common, plenty of other threads on here with this situation...

YorkshireBoy

HowieB17 wrote: »

Im a bit worried now tho, didnt consider a) tax implications and b) removal of OD with no notice.

You're forgetting c) 'benefit' issues (certainly for relative, possibly for you too)

WOULD I get no notice??

If the account is in credit AND there's been no history of account abuse, you'd probably get 30-60 days notice.

If there's some 'history', then they could remove it with no notice.

zerog

If your relative cannot communicate, you'd better not move her money around unless you have power of attorney.