Another multi-account thread

Demonic

Hi,

We are between homes at present, having sold our previous home and waiting for our new home to be built. As such we have a sum of circa £150k sat in our current account earning diddly squat.

I've been trying to figure out how best to get as much interest as possible in the months between now and completing on our new house, which is expected around April-May, so 5-6 months.

We already have a Santander 123 account in joint names and that is kept maxed.

Our Lloyds current account is Vanatge but not Club so I plan to upgrade that. This is our main account.

The rest of my thinking is along these lines:

2 x TSB Classic Plus - one each
3 x Nationwide Flex direct - one each and one joint
4 x Tesco current - two each
2 x Bank of Scotland Vantage - one each
2 x additional Santander 123 - one each in sole names
2 x additional Lloyds Club - one each in sole names

I'm not sure whether the additional Lloyds Club accounts are possible as I have some more reading to do.

I'm not completely new to using current accounts for interest, as I have Santander 123 account, but I am new to using them on this scale. It would mean opening an additional 15 accounts. :eek: I have the number of direct debits to cover the requirements (charities, gym, car tax,TV licence etc.).

Do those of you who are more experienced in these ways see any obvious holes that I've missed? I'm happy to open the accounts and do the monthly transfer dance as I view it as reasonable recompense.

The final questions (for now) are around credit checks. Do you know if each account request is likely to result in a credit check or would each bank check once, regardless of the number of accounts. Do banks where you already have accounts even do credit checks? Is there any impact of that many credit checks being run on a person in a short space of time?

Apologies for the long post but I'd appreciate any views on whether this is worth the time or whether I've got carried away with things and could just dump the whole amount in one place and earn comparable total interest.

YorkshireBoy

Demonic wrote: »

I'd appreciate any views on whether this is worth the time or whether I've got carried away with things and could just dump the whole amount in one place and earn comparable total interest.

Well you could earn 1.4% gross with the Post Office, splitting your cash 50/50 in two names of course to stay under the FSCS limit.

What's your average gross rate with all those current accounts?...3.xx%. Once you know this, and thus the resultant 'gain' you'll know if it's "worth the time". For example, if it's 3.3% average then your 'gain' is (very roughly) circa £84K x 1.9% / 12 x 5 = £665 gross (£532 after BR tax, and £399 after HR tax).

So, answer your own question...is it "worth the time"?

The unknown, of course, is the impact all these accounts/account searches will have on any mortgage application. What's your attitude to risk?

And what are you going to do with the other £65K?

Demonic

Thanks for the swift reply.

Firstly, our mortgage offer is in place and guaranteed until 30/06/2015. So, I would assume that is covered.

As for my attitude to risk, in this instance it is more tempered as I have already exchanged on my new house so I am committed to buying it. I can't risk not having the funds available for that and don't really want to be taking money out of my ISAs or planned cash reserves.

I just after a way to gain the most interest whilst having the money readily accessible in case the house is finished sooner.

One question I do have is where you get the 1.9% from in your calculation?

Cheers.

YorkshireBoy

Demonic wrote: »

Firstly, our mortgage offer is in place and guaranteed until 30/06/2015. So, I would assume that is covered.

That's a long way away. I'd have thought they'd do another credit search before completion. After all, you could have racked up a load of debt or worse between now and then.

As for my attitude to risk

Sorry I didn't mean investing. I meant the impact of many current accounts and associated credit searches might raise a few eyebrows with the mortgage lender.

One question I do have is where you get the 1.9% from in your calculation?

The difference between the assumed 3.3% average on the current accounts less the 1.4% you'd get with the Post Office savings instant access account.

Demonic

Thanks for the explanation of the 1.9%; I should have realised that.

As for the mortgage offer I'll check with the broker but I have read the offer and there is no mention of another credit check.

I won't risk the mortgage offer as it has the potential to wipe out any additional gains, at best, and the purchase of the house at worst.