Saving using multiple current accounts

pocketstrings

letThemPlay wrote: »

I would stay clear of the beginning of the month)

because interest is added at the end of the month? sorry if that's a clueless question... I /am/ clueless, but becoming less so by using this site!:j

pocketstrings

ps also, when Martin says this:

"New customers to no.1 customer service bank First Direct* get £125 to switch to it (till Fri, after it's £100)"

by switching, does he mean your main account would have to be First Direct so I'd have to change from Santander, or can you just set up FD as another current account?

Archi_Bald

pocketstrings wrote: »

by switching, does he mean your main account would have to be First Direct so I'd have to change from Santander, or can you just set up FD as another current account?

You can open an FD account without switching but you won't get the £125 (or £100 or whatever) switching bonus.

It's all in the Terms and Conditions.

bugbyte_2

Pocketstrings - to get the £125 you have to have an account to switch and close (not actually mentioned on website but 'switching' does imply this) - Unless you want to transfer everything from your Santander account you will need to consider opening another current account with *someone* and using this dummy account to switch.

I am currently going though the process myself - My current account is a joint one with First Direct. I don't want to close this as it is very good. Last week I set up a sole FD account in my name with £50 in it. Tomorrow I am going to switch a couple of minor DD's into it. Once that is complete, I will use Quidco (£40 switch) to switch this to Halifax (Another £100 switch, plus £5pm = £200). To maintain it I will need to bounce £750 in and out pm.

Halifax's terms are: Use the 'Current Account Switch Service' to transfer all the active credits and debits from the bank account that you hold with another bank and close this account.

Eco_Miser

pocketstrings wrote: »

Originally Posted by letThemPlay I would stay clear of the beginning of the month)

because interest is added at the end of the month? sorry if that's a clueless question... I /am/ clueless, but becoming less so by using this site!:j

Because weekends and bank holidays can (and will) disrupt timings for SOs and potentially cause a month with no incoming payments, and therefore no interest.

Actually, it's more important to avoid the month end, with the varying month lengths, it's best not to set up a standing order after the 26th.

For Santander, its the anniversary of opening, not the calendar month end, that's important.

pocketstrings

Sorry, I'm not sure why exactly, but I'm getting really confused about all this different time of the month SO stuff. I'm confused about when in the month to have the SO take the money from my Santander to do the payment to FD to meet their £1000 a month rule. It's like I have some kind of mental block or something - maybe I just think I'm missing something I'm not? :eek:

Also, don't have you have to do your SOs on different days so you make sure you have enough money? So...

The £1000 goes from Santander to FD on day x
The £1000 goes from FD to Santander on day x+1

???

bowlhead99

pocketstrings wrote: »

Also, don't have you have to do your SOs on different days so you make sure you have enough money? So...

The £1000 goes from Santander to FD on day x
The £1000 goes from FD to Santander on day x+1

???

There shouldn't really be an issue having money come in and go out on the same day.

However, some people like to be extra cautious and have the money 'sit' somewhere for a day, so that in your example, FD would only be trying to pay out cash that is already in its account first thing in the morning and not trying to pay cash out that perhaps won't arrive from Santander until lunchtime.

Then if for some reason the Santander payment came in to FD a day late (due to an error or a weekend or bank holiday that Santander treated differently to FD for some reason) then FD would not risk going overdrawn when it tried to pay out, if you had a day delay built in.

And also, people might think that if the bank ever complained at them for exploiting the terms and conditions to push them to the limit by just cycling cash through without really making a proper deposit that stays there overnight, they would be able to say "ah no, I really did properly deposit it, I just changed my mind and took it out the next day, honest guv".

This extra messing about with a day's delay to guard against errors or delays or to make it look like you are not exploiting the T&Cs to the absolute limit, is probably not needed. In any case, when you are maxing all your accounts it's unlikely that an account could ever go overdrawn even if one leg of the payment didn't come in on time.

The downside of doing everything with a day's delay is that you have cash arriving in an account and sitting there a day, it might knock that account over the maximum on which they pay interest and then the surplus cash misses out on earning a day of interest. Still, 1 day out of 31 on a small part of your total savings is neither here nor there really, a tiny fraction of a percent per year and so some people still do it with a delay and ignore the lost interest, or work around it by just keeping spare capacity in some of their accounts which is similarly inefficient.

But long story short, unless the terms and conditions say that the cash being deposited has to stay in the account at least one night, you don't need that "t+1" delay.

The only thing to consider on the dates is whether you have to make your minimum deposits within a fixed calendar month, or perhaps - depending on terms and conditions - your 'month' for an account to get paid interest is the anniversary of when you opened it and runs from e.g. 19th to 18th instead of 1st to 31st. You would want to make sure you work around those key days, so that you don't have your standing orders set for e.g. 28th and then in February that's a Saturday so the money didn't move to Monday March 2nd and they say you didn't make your minimum deposit during February at all.

Archi_Bald

If your current account uses calendar months (as FD do), just make the SO sometime around the middle of the calendar month.

If your current account uses statement months (as the Santander accounts do), just make your SO sometime around the middle of the statement month.

It should be easily possible to figure out a date that suits both accounts.

If both accounts have a balance of at least the SO, you can set up the SOs for exactly the same day.

If the balance on one account is lower than the SO and must receive the incoming SO before the outgoing SO can be made, you should either leave 3-5 days between your SOs, or make the payment manually.

Archi_Bald

bowlhead99 wrote: »

And also, people might think that if the bank ever complained at them for exploiting the terms and conditions to push them to the limit by just cycling cash through without really making a proper deposit that stays there overnight, they would be able to say "ah no, I really did properly deposit it, I just changed my mind and took it out the next day, honest guv".

I never knew that changing your mind is only allowed after 24 hours, lol.

Seriously, though: I have been making over a dozen same-day ins & outs by SOs for years and never had a problem.

I have, however, been pulled up by Halifax only last week, when I manually FPed £1,000 into a longstanding Halifax account from one of my Santander accounts (this Halifax account has had £1,000 SOs on the same day from and to another account for years). I then immediately tried to FP my £1,000 back to Santander (which was a new payee on the Halifax account), and found myself instantly locked out of Halifax, and with blocked online access. Even though I had just passed the telephone verification for setting up a new payee. The payment to Santander was not made. Somehow or other I had walked straight into one of their automated fraud prevention traps.

Halifax didn't bother calling or texting me about this "fraud", I had to contact them. It turned out to be a rather painful 30 or so minute telephone call with the Halifax fraud team who were extremely unhelpful and tried to make me answer what I considered totally unreasonable questions - e.g. multiple-choice Qs about data on my Experian file - - like: on which of the following 3 dates in 2009 (!!!!) did you open a current account? I eventually convinced the guy that it was hideous to believe people remember the exact date on which they opened a current account 5 or 6 years ago, and that if he wants to know what Experian hold about me he should consult Experian.

After what felt like a small eternity, I could convince him that all was in order and he re-instated my online access and allowed the payment back to Santander.

bowlhead99

Yes banks seem to be getting ever more diligent with their fraud algorithms these days but if you literally never make any manual payments out of an account and then start to, I can see why it gets flagged. Sounds like a bit of a pain, the questions I get from my banks are usually a bit easier (or I have my account open on screen when calling them just so I can answer questions about recent transactions...). Not had to time travel to know what month I opened an account though

The reason I mentioned "change your mind" is that sometimes people are nervous about companies withdrawing a perk if they think you are exploiting their goodwill, which let's face it, we are, and so they want to be able to say they are using the account all innocently and not extracting every penny out of an opportunity they read about on MSE.

But the reality is the banks know people exploit the accounts, and don't mind because at the end of the day the T&C has to draw a line somewhere and they know there will be a percentage of people who will exploit whatever they can and stay on the right side of the line while never engaging for any further services to help them break even on the offer. They still get the kudos of being able to say they have the highest rates in town and any publicity is good publicity, even if it is a loss leader.