Split banking?

helenjones833

I am looking to open a second current account with a separate debit card from my main account, to park a bit of money into each month and enable me to manage it separately.

Having looked into options, I decided a basic bank account was my best bet, as I just want something no frills, no need for overdraft, no hidden costs etc. So I went into HSBC to open one, but they told me I was not allowed to do so as I already had a current account elsewhere. They said there is a universal rule regarding "split banking". If you want to open a new account you have to move everything across. Also they said I shouldn't open a basic bank account because I don't have a poor credit record.

It turns out I can actually probably get the second account directly from my current bank so I'll probably end up going down that route, particularly as HSBC seem to reluctant to take my money. But just curious whether the rules they mentioned is genuine. Is it really forbidden to split banking? (assuming you actually tell the truth in the first place) and are people with good credit histories allowed to open basic current accounts?

Atidi

helenjones833 wrote: »

I am looking to open a second current account with a separate debit card from my main account, to park a bit of money into each month and enable me to manage it separately.

Having looked into options, I decided a basic bank account was my best bet, as I just want something no frills, no need for overdraft, no hidden costs etc. So I went into HSBC to open one, but they told me I was not allowed to do so as I already had a current account elsewhere. They said there is a universal rule regarding "split banking". If you want to open a new account you have to move everything across. Also they said I shouldn't open a basic bank account because I don't have a poor credit record.

It turns out I can actually probably get the second account directly from my current bank so I'll probably end up going down that route, particularly as HSBC seem to reluctant to take my money. But just curious whether the rules they mentioned is genuine. Is it really forbidden to split banking? (assuming you actually tell the truth in the first place) and are people with good credit histories allowed to open basic current accounts?

I'd have thought a savings or deposit account would best suit your needs - at least it will provide for a bit on interest on the money 'parked'. You could ask you own bank about this opportunity, or check out the various comparison sites if you want the best return (but that may well mean opening an account with a different bank)

Of course there are the few current accounts that do pay interest, and typically more than most savings/deposit accounts, but terms do apply (e.g. minimum monthly deposit) and I'm not sure HSBC offers one of them anyway.

Btw, I have more than one current account and they are with separate banks (as do many other people I'm sure) but they are not basic bank accounts. They are, nevertheless, free for day to day banking transactions and have no monthly fees.

Archi_Bald

helenjones833 wrote: »

They said there is a universal rule regarding "split banking".

If they said that, they were lying through their teeth. It's completely and utterly untrue that you are only allowed one current account, or that you have to have all your banking with the same bank.

Having 2 current accounts at different financial institutions is a great protection against Natwest-style system meltdown. You won't get the same protection if you have your 2 accounts with the same bank, or even with the same banking group.

You will be allowed a basic bank account if you have a good credit history, though the bankers (and perhaps specifically the HSBC ones) might look down on you. But more importantly, why let your money linger in an account which doesn't pay you any interest? There's a whole host of current accounts which do pay interest. http://www.thisismoney.co.uk/money/currentaccounts/article-2508319/The-savings-rates-current-account.html

Even savings accounts would be better than a non-interest paying current account. With Faster Payment, you can usually move your money literally instantly. Though a savings account won't give you the same protection as 2 current accounts at different financial institutions would.

Atidi

Archi_Bald wrote: »

...You won't get the same protection if you have your 2 accounts with the same bank, or even with the same banking group.
...

Though a savings account won't give you the same protection as 2 current accounts at different financial institutions would.

I know this may be highly judgemental, but I'm getting the strong sense the OP is not looking at total deposits in excess of £85,000

... but if I'm wrong then yes, it can be safer to split the money if you think one institution may go bust (and, even in such an event, you don't think the government will bail out the man in the street which it always has done in recent times with any UK bank that failed, not that the government have even allowed many UK banks to fail, despite many that would have done without the government's intervention)

ColdIron

Atidi wrote: »

I know this may be highly judgemental, but I'm getting the strong sense the OP is not looking at total deposits in excess of £85,000

I think the point Archi was making was protection against Natwest/RBS/Ulster Bank style system meltdown we saw last year not the protection offered by the FSCS

CLAPTON

helenjones833 wrote: »

I am looking to open a second current account with a separate debit card from my main account, to park a bit of money into each month and enable me to manage it separately.

Having looked into options, I decided a basic bank account was my best bet, as I just want something no frills, no need for overdraft, no hidden costs etc. So I went into HSBC to open one, but they told me I was not allowed to do so as I already had a current account elsewhere. They said there is a universal rule regarding "split banking". If you want to open a new account you have to move everything across. Also they said I shouldn't open a basic bank account because I don't have a poor credit record.

It turns out I can actually probably get the second account directly from my current bank so I'll probably end up going down that route, particularly as HSBC seem to reluctant to take my money. But just curious whether the rules they mentioned is genuine. Is it really forbidden to split banking? (assuming you actually tell the truth in the first place) and are people with good credit histories allowed to open basic current accounts?

there is no problem having several bank a/cs with different banking groups- I have three (including one with HSBC)

a 'basic' bank is generally targeted at people with poor credit histories so you would be better just getting an 'ordinary ' one rather than asking for a 'basic' one

you may want to consider a current a/c that provides some sort of benefit; santander or halifax or nationwide come to mind although some require a minimum payment in each month (this can simply be recycled from your main a/c).

CKhalvashi

CLAPTON wrote: »

there is no problem having several bank a/cs with different banking groups- I have three (including one with HSBC)

a 'basic' bank is generally targeted at people with poor credit histories so you would be better just getting an 'ordinary ' one rather than asking for a 'basic' one

you may want to consider a current a/c that provides some sort of benefit; santander or halifax or nationwide come to mind although some require a minimum payment in each month (this can simply be recycled from your main a/c).

I'm with this; my banking is split between 4 banks;

HSBC; main current account, cash ISAs (£90k+), investments
Santander; parking for £60k at 3%, bills paid, £100k bond
Halifax; £160k bond, 2x £5 a month
TSB; Parking for £30k at 3%, £120k bond

Apart from the first, everything is under the joint £170k, but it also allows easy access to cash should there be an RBS style meltdown, hence multiple current accounts.

CK

anna42hmr

Yeah they were feeding you a line. Probably to get you to switch to them ie direct debits etc. probably gets branch more points. If it was against regulations to have accounts elsewhere I would have breeched this a long time ago as alongside my main account I also have 3 extra current accs with lloyds (vantage) 3 Halifax reward accounts for the £5 rewards, tsb account (for enhance) and flex direct for the 5% rate.

Mulder00

No such thing.

I operate two current accounts and one of the questions to open the last one was whether I have another current account, whether I will be closing it and whether I will be paying my salary into the new account. Yes, No, No and they still opened it for me.

rb10

HSBC's products are generally poor - no one with financial sense would do their main banking there.

So it has to be all about sales, sales and sales.

The branch staff are thinking about their bonus. Chances are, they'll get no recognition for opening a basic account, some recognition for a full current account, but top points for getting you to switch your banking.

HSBC are well known for doing this - it's pretty poor really. I can't imagine they'll get away with doing it for much longer.

CKhalvashi

rb10 wrote: »

HSBC's products are generally poor - no one with financial sense would do their main banking there.

So it has to be all about sales, sales and sales.

The branch staff are thinking about their bonus. Chances are, they'll get no recognition for opening a basic account, some recognition for a full current account, but top points for getting you to switch your banking.

HSBC are well known for doing this - it's pretty poor really. I can't imagine they'll get away with doing it for much longer.

Whilst I do agree to an extent with the general gist of this, the regular saver, and some cash ISA products are generally good. I've got an 11.9% OD should it be needed, with the first £500 free, which isn't paid for.

I bank with them, as the company handles a lot of international transfers, but I do appreciate that unless you have high ISA balance, want the regular saver (same as first direct), do international money transfers or have a large investment balance (individual shares are purchased through a discount broker, I'm talking about funds), then there can be little point.

Take into consideration that their mortgage products can be some of the best on the market, too, before knocking.