Just had a brainstorm - Would this work? And is it worth it?

coldjim

Hi there,

Ive just had a brainstorm while looking into bank accounts and saving accounts, as i am looking to put my savings into a new account while adding to it but also be able to spend a little bit of my income at the same time. I would like an easy access savings account in case i ever run low on funds.

(Sorry if this next bit is long winded)

I currently have a Lloyds Graduate account (im a recent graduate from July this year) which everything comes in and out of including my part time job income and 2 direct debits which includes my phone and magazine subscription.

But i have recently signed up to Halifax due to the £100 switch offer (Set up a Natwest account the switched to Halifax straight away.... it worked!). With this account i also read u can earn £5 every month if i put in £500 a month and have two direct debits.....

Howeverrrrr.... I am looking into also setting up a new account with Santander Uk for the Santander 123 account for my savings so i can earn a high interest rate of 3%, I know there is a £2 fee each month and again you have to pay in £500 and have two direct debits.

Soooo... this is my idea...

I was thinking of having my Lloyds graduate as my income and spending account. While my two direct debits for my phone and magazine subscription split across Santander and Halifax (One Each). Then set up another direct debit on each account that pulls £500 from my Santander savings to the Halifax account, and then a direct debit on the Halifax account back into my savings account.
This means that i will have two direct debits on each account and £500 going in and out of the accounts so i can having the 3% on the savings from Santander 123 while also bagging £5 from Halifax thus paying my monthly fee on Santander 123 whilst also gaining £3 extra a month.
I can pay in money to the Halifax account when the funds run low with my Lloyds account.

Sorry if this is confusing, but im just wondering if this will work and if it is worth it? Sounds like a lot of work to just get 3% interest and an extra £3 a month, but with direct debits set up, it should work automatically?

Hope someone can help me! Thanks!

colsten

You got the right sort of idea but you aren't quite there yet. It can indeed work quite automatically as you can see from the many posts by people who have been doing this sort of thing for some time, and it isn't hard to do. It's definitely worth it as it is the best "savings" method for now. You just need to get your facts straight, then set up DDs and SOs as required.

Halifax min monthly deposit is £750, not £500.

You appear to confuse DDs and SOs. You cannot use a DD to pull money from one current account to another current account. Only thing you can do is push money by SO from one current account to another. Halifax and the 123 need two DDs each. The DD problem is easily solved with a couple of Tesco savings accounts, as these will allow you to pull money in by DD.

You also don't mention TSB Plus, Tesco current and Club Lloyds current accounts, or First Direct Regular Saver and Club Lloyds Monthly Saver - all of which pay more interest than the Santander 123. The 123 is a fabulous account for someone with several cashback-qualifying DDs, which you don't appear to have, and who can keep their balance above £3K. May be one for you once you have exhausted all the others?

coldjim

colsten wrote: »

You got the right sort of idea but you aren't quite there yet. It can indeed work quite automatically as you can see from the many posts by people who have been doing this sort of thing for some time, and it isn't hard to do. It's definitely worth it as it is the best "savings" method for now. You just need to get your facts straight, then set up DDs and SOs as required.

Halifax min monthly deposit is £750, not £500.

You appear to confuse DDs and SOs. You cannot use a DD to pull money from one current account to another current account. Only thing you can do is push money by SO from one current account to another. Halifax and the 123 need two DDs each. The DD problem is easily solved with a couple of Tesco savings accounts, as these will allow you to pull money in by DD.

You also don't mention TSB Plus, Tesco current and Club Lloyds current accounts, or First Direct Regular Saver and Club Lloyds Monthly Saver - all of which pay more interest than the Santander 123. The 123 is a fabulous account for someone with several cashback-qualifying DDs, which you don't appear to have, and who can keep their balance above £3K. May be one for you once you have exhausted all the others?

Right ok sorry... Im still kinda new to all this, and just want the best for my money and savings (who doesn't!? lol).

Could u expand more on the other accounts? Im not too sure bout them, only read about the Santander 123 one where you get 3%.

Also how many accounts can you have out at one time?

colsten

You can have as many current accounts as you like, subject to passing credit checks. Some here have more than 20.

Have a look at this thread - particularly the most recent 3 or 4 posts.

There are then separate threads about each of the accounts listed

coldjim

wow.... ok.. my mind is blown. lol I thought i had a good idea in the original post... now uve opened me up to a whole new world of banking

coldjim

colsten wrote: »

You can have as many current accounts as you like, subject to passing credit checks. Some here have more than 20.

Have a look at this thread - particularly the most recent 3 or 4 posts.

There are then separate threads about each of the accounts listed

After reading this article:

http://www.moneysavingexpert.com/savings/savings-loophole?_ga=1.35609961.939821186.1398778379

Is it fair for me to say that i can set up two TSB Classsic plus accounts with £2000 in each, then get 5% on each of the ac!!!!s, just by paying in and then taking out £500 from each account each month?

bsms1147

coldjim wrote: »

After reading this article:

http://www.moneysavingexpert.com/savings/savings-loophole?_ga=1.35609961.939821186.1398778379

Is it fair for me to say that i can set up two TSB Classsic plus accounts with £2000 in each, then get 5% on each of the ac!!!!s, just by paying in and then taking out £500 from each account each month?

Yes.

Monthly standing order from one of your TSB accounts to the other for £500.
Another standing order for the same amount in the other direction set for the same day.

Sorted.

coldjim

bsms1147 wrote: »

Yes.

Monthly standing order from one of your TSB accounts to the other for £500.
Another standing order for the same amount in the other direction set for the same day.

Sorted.

U mean i don't even have to do it from my main current account? I can just have £2000 in both accounts, then £500 comes out of one into the other and back again? But doesn't that mean im reducing one of the accounts to £1500 for a small period so i wont get 5% on the £2000?? Or does this not matter?

Sorry im new to this

EDIT - Also how do you apply for two accounts online??? Two Applications?

bsms1147

coldjim wrote: »

U mean i don't even have to do it from my main current account? I can just have £2000 in both accounts, then £500 comes out of one into the other and back again? But doesn't that mean im reducing one of the accounts to £1500 for a small period so i wont get 5% on the £2000?? Or does this not matter?

Sorry im new to this

Yep, the money can come from each of the other accounts (called internal transfers).

The interest is calculated on day-end balances. If you set both standing orders for the same day, you will still end the day with £2000 in each account.

And apply online, two applications one after the other using the same details.

Archi_Bald

coldjim wrote: »

Is it fair for me to say that i can set up two TSB Classsic plus accounts with £2000 in each, then get 5% on each of the ac!!!!s, just by paying in and then taking out £500 from each account each month?

Yes-ish(*) but you also must set communications, and statements, to paperless. If you don't, you will not get any interest.

*The interest you actually can make if you have £2,000 in the account all the time is the gross interest, 4.89%, minus tax at basic rate (20%). This is not unique to TSB, the principle applies to all interest paying accounts.

You would also want to skim off the monthly interest to another account as anything over £2,000 does not get interest.