Do you really need a Current Account ?.

This is hypothetical, but I am wondering if in practice this situation would work.

Let’s say a person has £20k in savings, Spread around various bank current accounts paying between 3% - 5% such as TSB, Lloyds Club, Bank of Scotland Vantage etc.

And let’s say that person also has a Credit Card and a Savings account with a different bank with whom he has no savings, the savings account has a card and he has online banking, and he can do transfers / Pay bills online from his savings account.

Could he just make do with the Credit Card and Savings card, so all purchases would be on the card, and when he needed cash out he could just use his saving account card, therefore completely by passing the need for a current account ?. The Credit Card would be paid in full each month from a Transfer from his Savings account, and any salary credits etc would be paid directly into his savings account.

Could it be done ?, and you would not need a current account ?.
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  • Ed-1
    Ed-1 Posts: 3,846
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    Ryan101 wrote: »
    This is hypothetical, but I am wondering if in practice this situation would work.

    Let’s say a person has £20k in savings, Spread around various bank current accounts paying between 3% - 5% such as TSB, Lloyds Club, Bank of Scotland Vantage etc.

    And let’s say that person also has a Credit Card and a Savings account with a different bank with whom he has no savings, the savings account has a card and he has online banking, and he can do transfers / Pay bills online from his savings account.

    Could he just make do with the Credit Card and Savings card, so all purchases would be on the card, and when he needed cash out he could just use his saving account card, therefore completely by passing the need for a current account ?. The Credit Card would be paid in full each month from a Transfer from his Savings account, and any salary credits etc would be paid directly into his savings account.

    Could it be done ?, and you would not need a current account ?.

    If you didn't have these current accounts, you wouldn't be earning much interest on the savings?
  • grumbler
    grumbler Posts: 58,590
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    edited 27 September 2014 at 12:55PM
    I think it's possible, but why this hassle as savings accounts normally come with a cash card and not all retailers accept credit cards? Not to mention DDs that most savings account don't offer.

    Is it not simpler just to use a CC with a current account - one of the 'various current accounts' the person has or yet another one if needed?
    We are born naked, wet and hungry...Then things get worse. :(

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  • Could probably be done but it would be vastly more complicated than using a current accounts. First problem would be to find a savings account with an ATM card. Other problems include not being able to do DDs and SOs, and you may not be able to have your salary or pension paid into a savings account.

    Also, as has already been pointed out, how would you get all the interest from current accounts without using current accounts?

    Anyway, why do you ask?
  • Ryan101
    Ryan101 Posts: 244 Forumite
    grumbler wrote: »
    I think it's possible, but why this hassle as savings accounts normally come with a cash card and not all retailers accept credit cards? Not to mention DDs that most savings account don't offer.

    Is it not simpler just to use a CC with a current account - one of the 'various current accounts' the person has or yet another one if needed?

    The idea was that the current accounts all had their maximum level off funding, and there were no 'Spare' Current accounts, £1k was simply circulated around all of them each month to get the interest.

    The savings account had a ATM card that could be used in all ATM's and paid interest, so rather than have another £1k paid into say Lloyds which would earn no interest (As you would now have £6k and the maximum is £5k) the savings account would at least pay something in interest and would keep the high savings separate.
  • Ryan101
    Ryan101 Posts: 244 Forumite
    Archi_Bald wrote: »
    Could probably be done but it would be vastly more complicated than using a current accounts. First problem would be to find a savings account with an ATM card. Other problems include not being able to do DDs and SOs, and you may not be able to have your salary or pension paid into a savings account.

    Also, as has already been pointed out, how would you get all the interest from current accounts without using current accounts?

    Anyway, why do you ask?

    The idea was that the current accounts all had their maximum level off funding, and there were no 'Spare' Current accounts, £1k was simply circulated around all of them each month to get the interest.

    The savings account had a ATM card that could be used in all ATM's and paid interest, so rather than have another £1k paid into say Lloyds which would earn no interest (As you would now have £6k and the maximum is £5k) the savings account would at least pay something in interest and would keep the high savings separate.
  • anoncol
    anoncol Posts: 982 Forumite
    But why all the hastle?
  • Ryan101
    Ryan101 Posts: 244 Forumite
    anoncol wrote: »
    But why all the hastle?

    Thats the only flaw in the plan, the alternative would be to either:

    1) Open another current Account (Paying no Interest)
    2) Have surplus in one of the other current accounts earning no interest.

    Which option is best ?.
  • jennifernil
    jennifernil Posts: 5,567
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    edited 27 September 2014 at 1:45PM
    Neither!

    Open a Halifax Reward account, only needs £750 per month paid in by any means, and 2 DDs. Then you get £5 reward per month no matter the balance, as long as you are in credit all month.

    Probably better than the interest from the same balance in a savings account.

    Transfer the surplus to somewhere it will earn interest, such as £300 pm to a FD monthly saver or/and £400 pm to a Club Lloyds monthly saver.

    If the savings are "only" £20k, you will not have maxed out all the available interest paying current accounts anyway, so you could even just designate one for "using" and keep a lower balance in it to remain under the cut off point for interest.
  • B_G_B
    B_G_B Posts: 502 Forumite
    edited 27 September 2014 at 2:02PM
    Ryan101 wrote: »
    Thats the only flaw in the plan, the alternative would be to either:

    1) Open another current Account (Paying no Interest)
    2) Have surplus in one of the other current accounts earning no interest.

    Which option is best ?.
    The question really then is “can I have multiple current accounts but not use the facilities they offer”.

    Why would you keep surplus in one of these accounts?

    Particularly with modern internet banking I find it easy to use current account facilities (i.e. debit card,DD’s etc) and keep the highest earning accounts topped up.

    It is a rare (if ever) that my highest interest paying accounts aren’t at their max, (neither above or below) even for 24 hours.

    The alternative for me then is good (read as anal / obsessive) account management.

    Edit....
    Oops, sorry, told lie. I do for example feed my FD current account a couple of days before the SO is due out for the regular saver. I do this for my own peace of mind, rather than leave it till the last moment.
  • Ryan101
    Ryan101 Posts: 244 Forumite
    Neither!

    Open a Halifax Reward account, only needs £750 per month paid in by any means, and 2 DDs. Then you get £5 reward per month no matter the balance, as long as you are in credit all month.

    Probably better than the interest from the same balance in a savings account.

    Transfer the surplus to somewhere it will earn interest, such as £300 pm to a FD monthly saver or/and £400 pm to a Club Lloyds monthly saver.

    If the savings are "only" £20k, you will not have maxed out all the available interest paying current accounts anyway, so you could even just designate one for "using" and keep a lower balance in it to remain under the cut off point for interest.

    I actually have one off these anyway, and have 2 DD's but only keep £10 in it, I suppose I could put the surplus in there ?.
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