Help with getting a new current account and saving account

lovemilk

So in theory someone could have quite a lot of current accounts - high interest and naff ones?

If you open all these accounts with the incentives - you don't have to switch right away? Like the M&S one you've got a certain time to do it?

I've read people open another account to create a dd of a £1, do you then send the pound back where it came from?

Does a credit rating improve each time one of these accounts is closed?

I've read that with the good rate savings accounts to cream the interest off each month - what does that mean?

Thank you.

TartanSaver

lovemilk wrote: »

So in theory someone could have quite a lot of current accounts - high interest and naff ones?

I have 8 (and will be getting more shortly for switching cash.) I've seen people on here saying they have over 20. That's hard to do without joint accounts, but entirely possible if you've got enough cash to spread around the high interest ones.

I have a similar amount to save as you, so I have enough accounts for interest maximisation already. Only one of my accounts is "naff." An RBS basic account I opened for the sole purpose of switching to Clydesdale for the cash. I recently created a Barclays basic for the same reason, and used it to open a First Direct account.

lovemilk wrote: »

If you open all these accounts with the incentives - you don't have to switch right away? Like the M&S one you've got a certain time to do it?

I think it's usually within a month or two, the terms vary for any given account. The M&S account is 6 months, I just looked it up.

Honestly though, the M&S account is pretty mediocre (no in credit interest and only £100 free overdraft.) I can't see why else you'd want to open it.

lovemilk wrote: »

I've read people open another account to create a dd of a £1, do you then send the pound back where it came from?

I've not done this (yet) but apparently you can open two different online savings accounts with Tesco and use them to set up direct debits pulling £1 from your other accounts. This allows you to meet the 2DD condition on many current accounts. This does NOT work with standing orders (where you send money from your account.) Direct debits have to be taken, not given. The sensible thing to do would be create the DDs for £1 from Tesco all on the same date, then transfer the cash back to other accounts the next day.

lovemilk wrote: »

Does a credit rating improve each time one of these accounts is closed?

Can't help you with this one, sorry.

lovemilk wrote: »

I've read that with the good rate savings accounts to cream the interest off each month - what does that mean?

I don't entirely understand the question, but here's an example of what I think you mean by "creaming the interest off":

I have £2000 in my TSB Classic Plus account. Every month I transfer £500 into it from another bank, to meet the account conditions. I then transfer back about £508, leaving exactly £2k in the account. This is because the account balance has increased because interest has been paid in by the bank. I COULD just leave the interest in there, but because the interest is only paid on balances up to £2000, it means that any money above the £2k will not earn interest at all.

I hope this helps.

lovemilk

TartanSaver wrote: »

I have 8 (and will be getting more shortly for switching cash.) I've seen people on here saying they have over 20. That's hard to do without joint accounts, but entirely possible if you've got enough cash to spread around the high interest ones.

I have a similar amount to save as you, so I have enough accounts for interest maximisation already. Only one of my accounts is "naff." An RBS basic account I opened for the sole purpose of switching to Clydesdale for the cash. I recently created a Barclays basic for the same reason, and used it to open a First Direct account.

I think it's usually within a month or two, the terms vary for any given account. The M&S account is 6 months, I just looked it up.

Honestly though, the M&S account is pretty mediocre (no in credit interest and only £100 free overdraft.) I can't see why else you'd want to open it.



I've not done this (yet) but apparently you can open two different online savings accounts with Tesco and use them to set up direct debits pulling £1 from your other accounts. This allows you to meet the 2DD condition on many current accounts. This does NOT work with standing orders (where you send money from your account.) Direct debits have to be taken, not given. The sensible thing to do would be create the DDs for £1 from Tesco all on the same date, then transfer the cash back to other accounts the next day.

Can't help you with this one, sorry.

I don't entirely understand the question, but here's an example of what I think you mean by "creaming the interest off":

I have £2000 in my TSB Classic Plus account. Every month I transfer £500 into it from another bank, to meet the account conditions. I then transfer back about £508, leaving exactly £2k in the account. This is because the account balance has increased because interest has been paid in by the bank. I COULD just leave the interest in there, but because the interest is only paid on balances up to £2000, it means that any money above the £2k will not earn interest at all.

I hope this helps.

It's all helped a lot. I'm getting my head around it all.

The 8 that you've got - have you opened them gradually over time or all in one go?

The money you transfer from each account to meet their monthly requirements - is that part of a savings pot from one account?

The M&S one I would open just for the incentive... Maybe it's good to only open them to use them.

Thank you.

TartanSaver

lovemilk wrote: »

It's all helped a lot. I'm getting my head around it all.

The 8 that you've got - have you opened them gradually over time or all in one go?

This time last year I had one bank account. 3 of them I opened in the last six weeks.

lovemilk wrote: »

The money you transfer from each account to meet their monthly requirements - is that part of a savings pot from one account?

I keep it in my Santander 1-2-3 account, where it earns me 3% interest. I use this account as my "main" account, as it pays cashback on my utility bills. It pays 3% between £3-20k, and I don't have £20k. I pay my salary into it, and use it for buying things. Just to be clear - the money never leaves this account for more than a few minutes. With faster payments (free bank transfer) transfers are usually instant.

For example: At the start of the month, let's say I have £4.5k in my 123 account. I log onto Santander online banking and transfer

£500 to TSB, leaving my 123 balance at £4k.
I log into TSB online banking and transfer the £508 (including interest) back to my 123, taking the balance back up to £4.5k
£1000 to my Nationwide flexdirect, then log into Nationwide and transfer the £1010 straight back.

The whole process takes about 10 minutes a month, and makes me £325 a year from £6500 in three accounts. It has taken me longer to write this post than it does to do all my monthly transfers.

lovemilk wrote: »

The M&S one I would open just for the incentive... Maybe it's good to only open them to use them.

I think you misunderstood me. What I meant was, why would you open it and NOT switch an account to it? It means you wouldn't get the incentive, and it's not a very competitive account for anything else. If you don't want to close one of your other accounts, set one up. Barclays basic don't do a credit check so no credit issues. I created one and switched it to First Direct within a fortnight.

There's no harm in opening them solely for switching bonuses. I'm currently waiting on First Direct to cough up, and I'll be opening a Clydesdale very soon too.

lovemilk

TartanSaver wrote: »

This time last year I had one bank account. 3 of them I opened in the last six weeks.



I keep it in my Santander 1-2-3 account, where it earns me 3% interest. I use this account as my "main" account, as it pays cashback on my utility bills. It pays 3% between £3-20k, and I don't have £20k. I pay my salary into it, and use it for buying things. Just to be clear - the money never leaves this account for more than a few minutes. With faster payments (free bank transfer) transfers are usually instant.

For example: At the start of the month, let's say I have £4.5k in my 123 account. I log onto Santander online banking and transfer

£500 to TSB, leaving my 123 balance at £4k.
I log into TSB online banking and transfer the £508 (including interest) back to my 123, taking the balance back up to £4.5k
£1000 to my Nationwide flexdirect, then log into Nationwide and transfer the £1010 straight back.

The whole process takes about 10 minutes a month, and makes me £325 a year from £6500 in three accounts. It has taken me longer to write this post than it does to do all my monthly transfers.



I think you misunderstood me. What I meant was, why would you open it and NOT switch an account to it? It means you wouldn't get the incentive, and it's not a very competitive account for anything else. If you don't want to close one of your other accounts, set one up. Barclays basic don't do a credit check so no credit issues. I created one and switched it to First Direct within a fortnight.

There's no harm in opening them solely for switching bonuses. I'm currently waiting on First Direct to cough up, and I'll be opening a Clydesdale very soon too.

Ah, I'm understanding it more now - that's all been really useful.

As you do the main switching accounts - are you moving dds for bills then?

Thank you.

grumbler

7-day bank switching era begins: Full Q&A - Money Saving Expert

TartanSaver

lovemilk wrote: »

As you do the main switching accounts - are you moving dds for bills then?

No. I keep actual bills at Santander for the cashback. Thus far, I have avoided accounts with dd requirements. However, the Tesco savings method (I mentioned above and in lots of threads on here) will allow you to meet dd requirements for the likes of Halifax and Co-op. According to the MSE page on this, M&S, Clydesdale and First Direct do not require dds.

YorkshireBoy

TartanSaver wrote: »

...allow you to meet dd requirements for the likes of Halifax and Co-op.

...and Nationwide, if switching via their refer-a-friend scheme (for £50 each).


And Club Lloyds, but I suspect the OP has that covered as Lloyds is their main account?

bolzano

... meet dd requirements for the likes of Halifax and Co-op

Note Halifax no longer has that requirement and for Co-op you can use 2 standing orders apparently.

YorkshireBoy

bolzano wrote: »

Note Halifax no longer has that requirement

The poster was talking about the Reward payment, not the switching incentive...I suspect?