moving money around accounts - idiots guide

melb

hi all I have been reading with great interest about people moving money around different current accounts to maximise moneyback and interest rate offers but am nervous about putting it into action! I have been with one bank for over 30 years.
I have opened an M and S account by switching an old halifax easycash account I just have a small amount in (well hoping it will go through as I am being called by phone on Monday - don't know what to expect but apparently it will take 30 minutes).
i have about £3000 I can use in my current account for moving around and get paid about £850 a month wages. I also have £7000 in a "savings" account which is hardly worthy of the word "savings"!
Is there some some way of working out the best order in which to move the money? I am thinking TSB for the 5% up to £2000 and the halifax to have my main current account in with direct debits of which I have 2 a month plus I could use the Lloyds one by paying in £1000 from the Halifax one.
Any help would be appreciated - I know i will do something wrong.

YorkshireBoy

If I understand you correctly you'll be using a Halifax Reward account as your main account?

I'd probably do this...

£2K @ TSB making 5% AER
£2.5K @ Nationwide making 5% AER (albeit only for 12 months)
£5K @ Club Lloyds making 4% AER

The above takes care of £9.5K of your £10K lump.

You'll need somewhere to send the interest each month (and the spare £500 from above), so may as well use a Tesco current account @ 3% AER?

A couple of Tesco savings accounts will take care of the DD requirements for Club Lloyds. They'll also be useful for setting up on M&S prior to a switch to Co-op? If you haven't already had a Halifax £100 switching incentive, then use Co-op for that. Don't forget the FD switching incentive too.

As to monthly funding:

Club Lloyds > Nationwide £1.5K
Nationwide > Club Lloyds £1.5K

and

TSB > Tesco £750
Tesco > TSB £750

Either manual transfers or SOs.

You'll satisfy the Halifax Reward criteria with your existing DDs and £850 monthly income.

The above will get you £200-300 in switching incentives, £60 in Reward payments, and £400+ in (gross) interest...total £700+ (£800 including M&S) over the next 12 months. That's the equivalent of a 7% (8% with M&S) return on your £10K in the first year!

Bet you've had worse years!

NotRichAtAll

tsb 5% x 2 accounts £4000 used no direct debits needed £500 back and forth once a month

santander 3% needs direct debits and £500 per month paid in cashback on utility,sky,phones and interest

thats all i do like yourself am not mega rich so its not too difficult to set up and keep track of

hope this helps

i also switched an empty unused account from rbs to halifax and got £100 for my time

agrinnall

NotRichAtAll wrote: »

tsb 5% x 2 accounts £4000 used no direct debits needed £500 back and forth once a month

Unless the OP already has 2 accounts, or can open a joint one, then this won't work as only 1 is allowed now.

My movements each month at the moment (still refining what I have, no Santander 123 yet) are Virgin e-saver £1000 to Nationwide Flexdirect, £1000 to TSB Classic Plus, then send the £1000 back to Virgin, all manual payments done in one day (assuming no delays).

YorkshireBoy

NotRichAtAll wrote: »

tsb 5% x 2 accounts £4000 used no direct debits needed £500 back and forth once a month

You're assuming there are 2 of them. We don't know that. It's now one sole account per customer with TSB.

santander 3% needs direct debits and £500 per month paid in cashback on utility,sky,phones and interest

With only (the remaining) £6K in Santander, the fee will impact on the equivalent interest return...

£6K x 3% x 0.8 = £144 net
Less the fee is £120
£120 on £6K is only 2% AER (after BR tax).

I'd suggest Santander wouldn't be a good option (for interest earning purposes) yet.

jennifernil

New TSB Classic+ customers can now only have 1 sole account.

For 3%, BOS Vantage accounts are also good, you can still have 3 of them, and no DDs required.

pinkdalek

Well there are a lot of idiots on here so this thread will be very useful to them.....:D

trailingspouse

We have three accounts (a Club Lloyds each, and a joint Santander), and we move money between them to fulfill the terms and conditions. On the 1st of the month money goes from Santander to one of the Club Lloyds accounts. On the 2nd, the money goes from the Club Lloyds to the other Club Lloyds, and on the 3rd it goes back in to Santander.

If you're worried about getting it wrong when you set it up, write it down first before you begin.

YorkshireBoy

trailingspouse wrote: »

We have three accounts (a Club Lloyds each, and a joint Santander), and we move money between them to fulfill the terms and conditions. On the 1st of the month money goes from Santander to one of the Club Lloyds accounts. On the 2nd, the money goes from the Club Lloyds to the other Club Lloyds, and on the 3rd it goes back in to Santander.

Is your main account (the one that receives your incomes) held elsewhere and these are just savings accounts?

If not, and Santander also receives your incomes (of more than £500 a month), you could make some improvements:

1. Cross fund the 2 Lloyds accounts, and
2. Make the dates the same (2nd working day of the month is good since you can cream off the interest whilst you're at it), as 1 day delays are not necessary and are almost certainly* losing you interest.


* Unless you're running with less than £3.5K in each Lloyds account.

melb

thanks all I know what I'm going to be doing when the footie finishes (or perhaps during it at this rate!) It does sound complicated but will sit with a notepad and get my head round it. Thanks for all your efforts everyone x

polymaff

trailingspouse wrote: »

We have three accounts (a Club Lloyds each, and a joint Santander), and we move money between them to fulfill the terms and conditions. On the 1st of the month money goes from Santander to one of the Club Lloyds accounts. On the 2nd, the money goes from the Club Lloyds to the other Club Lloyds, and on the 3rd it goes back in to Santander..

Works for you, no doubt, but not good general advice. Accounts like the Club Lloyds have a common monthly "turnover" date. For accounts like the Santander 123 the "turnover" date is set by the account's opening date - and so will differ from account to account.

Best advice is to look across the accounts you are managing and then look for turnover-date-free "windows" that will encompass the timescale of the transfer mechanisms used and the fact that not all days are bank-transacting days.

Not as forbidding as it sounds - and the same approach will work with your 3 accounts - and our 41 accounts.