5% Savings Loophole

YorkshireBoy

Romburner wrote: »

Interest is calculated daily and added monthly (I believe calculated on the 1st of each month with Lloyds).

First you say it's calculated daily, and then you say you believe it's calculated on the 1st of each month. Did you mean to say 'credited' on the 1st of each month?

In actual fact, interest accrues daily from the 2nd working day of the month until the 1st working day of the next month, whereupon it is paid to the account (and compounds if there's room!) at close of business overnight, ie at the end of the first working day of the month. According to the account T&Cs at least...and in practice.

Each day in effect has the 5%^(1/365).

I'm only aware of one savings account provider that has, in fairly recent times, operated with daily compounding...and that was Egg Banking.

So, each month may have different days (28/29/30/31) which will affect the interest.

More accurately, each Lloyds billing period may have 28/29/30/31/32/33 and, in Dec 15/Jan 16, even 34 days.

themanfromamarillo

How much should I spread out my applications? I'm looking at opening another current account, currently have 4, 2 opened last summer, one in late November and one last month. Is a 3rd application in 3 months too much?

YorkshireBoy

themanfromamarillo wrote: »

How much should I spread out my applications? I'm looking at opening another current account, currently have 4, 2 opened last summer, one in late November and one last month. Is a 3rd application in 3 months too much?

For me it wouldn't be (this time last year I opened nearly 20 over the same timescale), but then again I don't need a (re)mortgage, loan, or credit card in the next few months. Do you?

themanfromamarillo

Not planning on buying a place for the next 18 months at least.

Aboatforxmas

YorkshireBoy wrote: »

By using the above mentioned TSB Plus account, circa £6 and £75 (gross) respectively.

In contrast, by playing the switching incentive game you'd probably make around £600-700 over the next year.

So, assuming you're over 18, where are you going to concentrate your efforts?

Ive read through the posts and I'm still confused . How exactly do I play the switching game? Do I really get the 3/4/5% for paying in one day and transferring it the next? some recent posts seem to be saying that you interest per day........?
Please help

bobobski

Aboatforxmas wrote: »

Ive read through the posts and I'm still confused . How exactly do I play the switching game? Do I really get the 3/4/5% for paying in one day and transferring it the next? some recent posts seem to be saying that you interest per day........?
Please help

Welcome to the game!

Your post mixes two questions:

1. Most accounts require a minimum deposit every month (e.g. TSB = £500). So you can deposit this one day and return to the originating account the same day (some people like to leave a day or two in between, for various reasons). This satisfies one of the Ts & Cs of the good interest rates.

2. Interest is calculated daily. This makes a difference depending on whether you are "maxing out" the account. Taking TSB as a basic example, if you have £2,000 in there, you don't want to leave "extra" money (e.g. interest/your minimum monthly pay-in) hanging around any longer than it needs to, because the interest is 5% up to (but not over) £2,000. So your interest will be approximately £8.30 per month (pre-tax; see other threads for why this fluctuates month on month). However, if you have less than the maximum for the good interest rate, then it's better to leave "temporary" deposits in there for as long as you can. Using my own example, I haven't been able to "fill" my TSB to £2,000 (will do so next week). So no point doing my monthly minimum pay in on pay day (28th) and back out the next day (29th) - I may as well leave it hanging around until 12th (regular saver day), when that money goes into other high interest accounts. That way, I earn good interest on that money until it can go into another account where it will earn good interest. And then I can max out the account in question. Then, when I do so, there will be no point having £500 earning nothing in there so I may as well transfer it out on the day I transfer it in (and in case these transfers happen the wrong way round, I still have £1,500 buffer in my TSB so I won't go overdrawn) and put the £500 into another account (e.g. Nationwide FlexDirect) where it will earn good interest.

I'm rubbish on switching incentives ("earn £[120] if you switch to us") as I don't use them much, but some on here do and will advise!

I feel like I have confused matters rather than helping. Thanks, wine!

Eco_Miser

Aboatforxmas wrote: »

Ive read through the posts and I'm still confused . How exactly do I play the switching game?

By opening easy to open accounts, then switching them to banks offering switching incentives. Make sure you read and understand the terms of each offer, and that you comply with them.

Aboatforxmas wrote: »

Do I really get the 3/4/5% for paying in one day and transferring it the next? some recent posts seem to be saying that you interest per day........?
Please help

This is a different game: the high interest current account merry-go-round. Here you open several accounts that pay 3/4/5% on amounts limited to £2000/£2500/£3000/£5000/£20000, PUT THAT AMOUNT IN THE ACCOUNT, and earn interest on it. To meet the conditions of these accounts you need to pay in a specified amount each month - this is where paying in one day and transferring it the next comes in - you need to pay in to qualify for interest (or avoid a fee), but you earn the interest on the amount you leave in the account. The interest is actually calculated on the amount in the account each day, at 1/366th of the annual rate.

SpeedSouth

I'm just opened up single accounts for me and the missus at Lloyds. Now want to open the joint one for 4% as well.

However when I try and do this logged on it doesn't give me the option. Only to make current one joint or apply for a regular one.

Are you still able to have 3 between two of you, or do I simply need to apply from the main page?

Kendall80

adam81 wrote: »

I'm just opened up single accounts for me and the missus at Lloyds. Now want to open the joint one for 4% as well.

However when I try and do this logged on it doesn't give me the option. Only to make current one joint or apply for a regular one.

Are you still able to have 3 between two of you, or do I simply need to apply from the main page?

You may need to make your solo one joint and then apply for another solo account in your name.

ceredigion

adam81 wrote: »

I'm just opened up single accounts for me and the missus at Lloyds. Now want to open the joint one for 4% as well.

However when I try and do this logged on it doesn't give me the option. Only to make current one joint or apply for a regular one.

Are you still able to have 3 between two of you, or do I simply need to apply from the main page?

I have been through this . The procedure , log in ,apply for a classic account, when approved probably instantly , then apply to have a second name added to the account to make it a joint . Then ring them up and ask them to upgrade it to a club Lloyds. Sounds long winded I know , but I managed to get a joint club Lloyds up and running within a week.