Cycling funds via SO. Will it make me overdrawn on accounts with £0 balance?

ricz_1

Hi Moneysavers,

More of a mental exercise in the optimal way to cycle money than a real issue:

I'm making some adjustments to my interest machine an I've ended up with a situation where I need to leave an account which would ideally have zero balance (rubbish interest rate) in the middle of my cycle. The standing order for this account goes out before the standing order from the previous account in the cycle goes in, potentially leaving me overdrawn for a short amount of time on cycle day.

I did think about splitting my cycle over 2 days but then weekends and bank holidays may still mean that all the transactions happen on the same day.

I'd ideally like to have everything work by standing order rather than need to do manual payments.

Open to any ideas or suggestions.

Thanks,

Rich.

norm_

Either set the SO to this account 3 days in advance. Or don't use a SO and manually transfer the money out (I have two accounts like this and all it means is logging in one day of the month to do).

YorkshireBoy

Listing your accounts would be a good start.

However, if you're using an otherwise dormant Halifax Reward account in the mix, manual transfers would be unavoidable I'd imagine*.

I've managed to get my system fully automated apart from 3 of my Halifax Reward accounts and my Nationwide FlexAccount (which all sit with very small balances normally). I make these transfers manually on payday each month.


* I'm not sure how Halifax deal with 'interday' overdrawn balances, ie would you lose the fiver if the 'interday' balance went to -£750?

ricz_1

Thanks Yorkshireboy.

The account in question is a HSBC Advance account I have wedged between 2 TSB Classic Plus accounts.

I also have a Halifax at the end of the cycle which I manually transfer funds out of and back into my (not full) 123 account once the cycle has run.

Whole cycle looks like this,

Santander 123 -> £1750 -> Club Lloyds -> £1750 -> TSB1 -> £1750 -> HSBC Advance ->£1500 -> TSB2 -> Halifax Reward -> £1500 -> Santander 123.

With £250 per month going from my HSBC Advance to a Regular Saver

I'd rather keep the HSBC in the middle there so as not to have all my HBOS accounts in a single chain (call me paranoid).

YorkshireBoy

Observations:

You're not dropping off £250 at TSB for the reg saver.
You're not dropping off £400 at Lloyds for the reg saver.
You don't say how you're getting the interest out of TSB & Lloyds. Presumably with Lloyds a pair of Tesco DDs does the job for you?

How about:

Make TSB self funding/automated with 3 SOs...

£500 from TSB1 > TSB2
£506.50 from TSB2 > TSB1
£13.00 from TSB1 > Santander 1-2-3

Then using the 'hub' approach, again with SOs...

£1,500 from Santander 1-2-3 > Lloyds
£1,500 from Lloyds > Santander 1-2-3

and then...

£1,750 from Santander 1-2-3 > HSBC

Then, manually...

£1,500 HSBC > Halifax
£1,500 Halifax > Santander 1-2-3

So, just 2 manual transfers to make, taking all of 5 minutes each month?

ricz_1

May get the regular savers sorted out later. For the extra 1% from the Lloyds I'm not really in any rush. Next on the list is FD for the 6% and switching bonus. Just giving my credit file a rest for a couple of months. Yep you're right regarding the 2 x Tesco DDs, these get paid from the interest/reward from the current accounts.

The Hub system might work well, and would also solve the problem of the HBOS accounts feeding into each other. As long as I can convince Santander's slightly overzealous anti-fraud department to let the various payments out.

eskbanker

ricz_1 wrote: »

I'd rather keep the HSBC in the middle there so as not to have all my HBOS accounts in a single chain (call me paranoid).

You do realise that TSB is no longer connected to HBOS (or indeed Lloyds Banking Group)?

ricz_1

I do, but this thread has made me a bit cautious. And I'm sure that I read somewhere that although TSB is now a separate entity they can still share certain information with LBG.

eskbanker

ricz_1 wrote: »

And I'm sure that I read somewhere that although TSB is now a separate entity they can still share certain information with LBG.

....in which case, yes, I will call you paranoid then!

Vortigern

Halifax (and the rest of the Lloyds banking group AFAIK) have changed the way they deal with outgoing SOs when there is not sufficient cash in the account. They say they will try to pay the SO later the same day, and if that fails they will try again the next day.

Has anybody tried to take advantage of this?

For example if a Halifax account has a nil balance and no agreed overdraft.

• Halifax attempts to pay £750 SO at 0001hrs and fails.
• Halifax receives incoming £750 SO at 0900hrs
• Halifax then pays the failed SO at 1500hrs

...or is this taking the proverbial?

NB the above transaction times are just examples. I have no idea what time SOs are processed by any bank.

colsten

Vortigern wrote: »

Has anybody tried to take advantage of this?

What's the advantage?