5% Savings Loophole

retep53

I just need a quick piece of advice. I want to set-up standing orders to circulate the necessary monies through various 5% loophole-type accounts but I think what might cause problems is when standing order dates fall on a weekend or bank holiday. I believe, even with "Faster Payments", Standing Orders get delayed to the next working day, which means, in the worst case scenario, Easter, could delay a payment planned for Good Friday not actually being paid until the following Tuesday or possibly a similar 4 day delay over the Christmas period. Is this still the case?
If it is, perhaps we should be pressing the regulator to force a change. It doesn't seem right that an immediate payment or a "pre-dated payment" can go through over a week-end or on a Bank Holiday but a Standing Order (which is after all, only a multiple "pre-dated payment") does not!

anna42hmr

Yes standing orders will not go until the next working day, and to be honest it can be sorted easily by setting them up mid month for example where there are less chances of a bank holiday and will ensure funds are paid in the right month (i.e. Not rolling over to the next month if the date falls on a weekend and next working day is a new month)

colsten

anna42hmr wrote: »

Yes standing orders will not go until the next working day

I think one or two banks do process SOs on non-working days. Tesco could be one of them.

Eco_Miser

retep53 wrote: »

I just need a quick piece of advice. I want to set-up standing orders to circulate the necessary monies through various 5% loophole-type accounts but I think what might cause problems is when standing order dates fall on a weekend or bank holiday.

So long as you don't set a standing order for the 26th or later (or five days before your period end for Santander 1-2-3 style accounts), when a delay could put the payment into the next month, you should be OK, since each of your accounts presumably has more than the amount you will be SOing out of it, should the banks get out of sync over a long weekend. This doesn't apply to a Halifax Reward account, worth having for the £75 pa gross reward, which is probably best done with a manual faster payment.

Personally I use faster payments for all the circulation, but I have irregular income, so couldn't be doing it all by SO anyway.

anna42hmr

colsten wrote: »

I think one or two banks do process SOs on non-working days. Tesco could be one of them.

I didn't realise that, i have a tesco one but have not got any so's on that so not noticed it, but all the other accounts i do have don't seem to do that (yorkshire, lloyds, halifax, bos, santander, nationwide etc) so tesco must be one of the few that do

INTERESTED

st1sof wrote: »

Hi Badger09,

Thanks for responding. I do have 1 Tesco CA, table updated below.

In Interest Rate order, I have:

Nationwide FlexDirect 1x£2,500@5%
TSB Classic Plus 2x£2,000@5%
Club Lloyds 1x£5,000@4%
Bank of Scotland Classic Vantage 2x£5,000@3%
Tesco Bank Account 1x£3,000@3%
Santander 123 1x£20,000@3%-£2pcm

Club Lloyds Monthly Saver already in operation.

Getting individual accounts for the Mrs is asking a lot really. It's taken ages to persuade her to go for the Santander 123 and only because you can squirrel away £20k in one go. She's not interested in all the hassle of setting up these accounts and looking after them so I choose to fight the battles I have a chance to win, joint accounts are such a battle.

st1sof

Hi I am new to forum blogging so hope I am doing this right. My husband is the same - so why not max out on sole accounts and where allowed joint accounts? With Santander, for example, you can have a sole and a joint - so could lodge £40000 in total.

INTERESTED

Hi - anyone any idea how this will work - and more importantly will the tax free element of £1000 interest be applied to current accounts - or just savings accounts?


Most of my money is now in high interest current accounts - it would be great if it did apply - but suspect they are going to make financial institutions define savings accounts very specifically.


Thanks

masonic

INTERESTED wrote: »

Hi - anyone any idea how this will work - and more importantly will the tax free element of £1000 interest be applied to current accounts - or just savings accounts?

Most of my money is now in high interest current accounts - it would be great if it did apply - but suspect they are going to make financial institutions define savings accounts very specifically.

There's no reason to think it would be restricted to certain types of account. There is even speculation that interest from P2P lending will be included.

shawd04

Hi guys, i'm fairly new to this game as it can be quite faffy setting up everything. Just have a quick question though.

For example with the TSB, the 5% interest is paid on a maximum of 2000 pounds.

So if the balance ever exceeds 2000, even for a day, would this result in me totally losing the interest for that month?

Or is it easier to transfer OUT the 500 and put the next 500 IN the day after? I imagine the difference interest would be tiny.

If anyone has any experience of this, I would be eager to know.
Thanks.

10_66

shawd04 wrote: »

Hi guys, i'm fairly new to this game as it can be quite faffy setting up everything. Just have a quick question though.

For example with the TSB, the 5% interest is paid on a maximum of 2000 pounds.

So if the balance ever exceeds 2000, even for a day, would this result in me totally losing the interest for that month?

Or is it easier to transfer OUT the 500 and put the next 500 IN the day after? I imagine the difference interest would be tiny.

If anyone has any experience of this, I would be eager to know.
Thanks.

If your balance exceeds £2K it's just the amount exceeding this on which you wouldn't receive any interest, ie, if you had £2,500 in you'd get interest on £2K, but not on the £500.