5% Savings Loophole

YorkshireBoy

caveman38 wrote: »

You always come back with that one YB. You know I haven't read them properly (thoroughly) be a pal and just tell me - please.

OK, I'll ask the question a different way...

Do your Tesco savings account T&Cs say - in the 7th sentence of the very first section, entitled 'About your account' - "Please note that you can set up more than one Linked Account"?

Because mine do.

caveman38

Thanks for that. I have to confess that I was unaware that a linked account was in fact a DD - as initially it sets one up to a nominated account ie. default current account which it asks you if you want a regular payment. In which case there is always one set up when the account is opened.
Therefor I want to draw funds a further 3 times (DD's) which I assume by "Please note that you can set up more than one Linked Account" will allow me to set up a further 3 on each of my two savers.?

YorkshireBoy

caveman38 wrote: »

...I assume by "Please note that you can set up more than one Linked Account" will allow me to set up a further 3 on each of my two savers.?

I've currently got 9 Linked Accounts on one of my Internet Savers and 6 Linked Accounts on my Instant Access Savings Account.

Westie983

I have eight linked accounts on both my instant saver and my instant access savings accounts.

These fund the DD requirements for my accounts at Halifax x 3, Club Lloyds, Barclays.

I also mix it up by using Paypal too.

Ian_Bruce

I have two adult sons with their own bank accounts. I trust both of them completely.

Rather than just restricting the circular payment between the three banks (Bank of Scotland, TSB and Nationwide) as described in the original MSE article, I am wondering whether I can benefit from the high interest available from EVERY bank listed in the article's table by setting up direct debits to my two sons paying the minimum payments required by each bank. They then set up direct debits to pay the same amount of money back to these accounts a day or so later. This will allow me to get higher interest on much larger sums of money than just £30K.

If banks are alert to identical sums of money simply passing back and forth between two people, maybe a variation of this scheme will work. In the second scheme, I set up all my monthly direct debits from these banks to Son No 1. He sets up direct debits to send these sums to Son No 2 a day or so later. Finally, Son No 2 sets up direct debits to send these sums back to me a day or so later. In other words, for any given bank account, the money going out each month by direct debit to one son's account is repaid by an entirely different person (my other son) from an entirely different account.

Then there is a third possible scheme whereby the money either travels "clockwise" or "anticlockwise", i.e some money travels from me to Son No 1 to Son No 2 and back to me, the rest from me to Son 2 to Son 1 and back to me. I am not sure if there is any advantage in doing this though!!

The final thought is that if either of my sons wish to benefit from a similar investment into some or all of these banks, they could make use of these bank transfers to qualify for the various interest payments in their own right.

Will any of these cunning plans work or do the banks have rules to stop my evil manipulations? Comments would be appreciated.

bigadaj

You can do this but you can also set up accounts and payments to yourself, nothing stopping you having a series of transfers between a large number of accounts which will fulfil the paying in criteria. Direct debits are more of a Problem for many solved where not otherwise available by most people by either tesco savings accounts or small charity donations.

colsten

Money is not shipped around current account by Direct Debits but by Standing Orders.

It doesn't matter whether you fulfill the minimum monthly deposits by sending money from our own accounts to your own accounts [at different banks] or whether it is someone else's accounts.

I don't understand how involving someone else in fulfilling the monthly minimum deposit requirements will allow you to "get higher interest on much larger sums of money than just £30K". You can get 3%+ on £50.5K just using your own accounts. If you take out joint accounts with someone else and each of you exploits all available options, the total between two people is some £120K.

May be the original MSE article you refer to is just looking at a subset of what is possible. You probably find more information on the forum as there are many people experienced with running multiple accounts.

Ian_Bruce

bigadaj wrote: »

You can do this but you can also set up accounts and payments to yourself, nothing stopping you having a series of transfers between a large number of accounts which will fulfil the paying in criteria. Direct debits are more of a Problem for many solved where not otherwise available by most people by either tesco savings accounts or small charity donations.

My apologies, I mentioned standing orders when I should have said direct debits.

I was referring to the original article for this thread "5% Savings Loophole", which I had just read, which stated "Some of them require you to set up direct debits (and, no, you can't usually just pay these to another of your bank accounts) which makes life difficult" - and then went on to elaborate an elaborate circular scheme transferring money between the three banks that DID allow this to happen. Effectively all I am suggesting is a scheme that allows circular transfers of money .between people rather than banks, involving ALL the banks listed in the original article, not just three of them.

Archi_Bald

The circulation system suggested by the article is complete overkill as you can do everything on a single day. If the article suggests you can only do three banks with your own accounts, it is just plain wrong. As was said already, you can do all accounts at all banks with your own accounts. You do not need any third party for the minimum monthly deposits.

You will of course need third parties for any required DDs but you cannot use current account to pull money by DD. It needs to be companies, or savings accounts, that you authorise to collect money from your accounts by DD.

Ian_Bruce

colsten wrote: »

Money is not shipped around current account by Direct Debits but by Standing Orders.



It doesn't matter whether you fulfill the minimum monthly deposits by sending money from our own accounts to your own accounts [at different banks] or whether it is someone else's accounts.

I don't understand how involving someone else in fulfilling the monthly minimum deposit requirements will allow you to "get higher interest on much larger sums of money than just £30K". You can get 3%+ on £50.5K just using your own accounts. If you take out joint accounts with someone else and each of you exploits all available options, the total between two people is some £120K.

May be the original MSE article you refer to is just looking at a subset of what is possible. You probably find more information on the forum as there are many people experienced with running multiple accounts.

Sorry, I should have said direct debits. As mentioned in another of my replies, I was referring to the original article for this thread, "5% Savings Loophole", not a subset. I was specifically referring to the the statement in that article about circular money payments to banks: "Some of them require you to set up direct debits (and, no, you can't usually just pay these to another of your bank accounts) which makes life difficult"