Moving money between accounts

GenerationRent

I've been opening multiple accounts recently to take advantage of the increased interest.

The thing that confuses me about how this works, is how you are supposed to move money into and out of the account.

For example...

I have a Santander account with a five figure sum in it and a TSB account with £2k in it. The TSB account says that you need to fund the account with £500 a month.

So do I send the £500 before or after I remove the same amount to a different account to maximize interest?

The next part of my plan is to open a BoS account and do the following...

Day 1) Move £1000 into the TSB account from the Santander account.

Day 2) Move £1000 into the BoS account from the TSB account.

Day 3) Move £1000 from the Bos account into the Santander account.

Or can all of this be done on the same day?

Cornucopia

You need to read the Ts & Cs for each account to understand the requirement for funding, as they vary.

There are some discussions here about the absolute optimal way to do all of this (making use of daily payment deadlines), but as long as you have the funds in both accounts, there is no issue in simply swapping funds on the same day. That can assist with other budgeting requirements, whereas circulating funds in a loop can get confusing.

polymaff

GenerationRent wrote: »

I've been opening multiple accounts recently to take advantage of the increased interest.

The thing that confuses me about how this works, is how you are supposed to move money into and out of the account.

For example...

I have a Santander account with a five figure sum in it and a TSB account with £2k in it. The TSB account says that you need to fund the account with £500 a month.

So do I send the £500 before or after I remove the same amount to a different account to maximize interest?

The next part of my plan is to open a BoS account and do the following...

Day 1) Move £1000 into the TSB account from the Santander account.

Day 2) Move £1000 into the BoS account from the TSB account.

Day 3) Move £1000 from the Bos account into the Santander account.

Or can all of this be done on the same day?

I do those three banks you mention - and plenty of others - all within the same two hours.

Forty transactions, month after month - with no problems at all.

EDIT: Hmmm, that's tempting fate, isn't it?

GenerationRent

polymaff wrote: »

I do those three banks you mention - and plenty of others - all within the same two hours.

Forty transactions, month after month - with no problems at all.

EDIT: Hmmm, that's tempting fate, isn't it?

Interesting.

Consider the following example if you will..

You have a TSB account with £2,000 in it for max interest. You send the obligatory £500 into it from some outside source and then immediately move £500 to a different outside source so that you currently have £1,500 in your TSB account while you wait an hour or two for the first transaction to clear via faster payments.

How much money do they then take into account for your interest payment? £2,000 or £1,500? Or is it an average for the month, which in this case I guess would be extremely close but not quite equal to £2,000.

YorkshireBoy

Interest is calculated daily on that days closing balance.

So long as you have £2K in the account at close of business each day it matters not what the intra day balance is.

GenerationRent

YorkshireBoy wrote: »

Interest is calculated daily on that days closing balance.

So long as you have £2K in the account at close of business each day it matters not what the intra day balance is.

Ah... didn't realize that. Actually makes everything super easy. Thanks for that.

polymaff

GenerationRent wrote: »

Interesting.

Consider the following example if you will..

You have a TSB account with £2,000 in it for max interest. You send the obligatory £500 into it from some outside source and then immediately move £500 to a different outside source so that you currently have £1,500 in your TSB account while you wait an hour or two for the first transaction to clear via faster payments.

How much money do they then take into account for your interest payment? £2,000 or £1,500? Or is it an average for the month, which in this case I guess would be extremely close but not quite equal to £2,000.

As YB says. The only snag is if a payment is held overnight - although I believe that the rule is that if this happens the paying organisation must put the money back into the source account so that interest may be accrued.

The only recommendation I'd make is to always test a new payee with a few quid before using it in a sequence of transfers. That way you don't pay too heavily for your own error - and you dispose of the delay which can accompany a first-time payment.

My own routine, FWIW, is loads of transfers from Santander 123 accounts to others, transfers on to other accounts and, finally, consolidated payments back to Santander. By consolidated I mean that I make, for example, six payments to six TSB accounts, but, after consolidating those payments within one account, a single payment onward from TSB.

More a reflection on my frustratingly slow broadband than a recommendation

agrinnall

GenerationRent wrote: »

Ah... didn't realize that. Actually makes everything super easy. Thanks for that.

And the safe way of doing it (which is what I do) is not to move the money on until it shows as having been received. Generally that means I can do all the moves within a couple of hours, but occasionally I might have to wait until the next day to do one of the transfers.