Opening multiple current accounts

dutchcloggie

Hello,

I am about to open a TSB current account to get the 5% interest and use the 5% saver interest. I want to maximise my savings by setting up a whole bunch of current accounts and rotate money around them, as suggested by Martin. However, I am looking to buy a house in the next 12 months. Martin does mention opening multiple accounts may impact my mortgage application (which seems annoying because I am doing it to save more money for this mortgage!).

How unwise is it to open 5 new bank accounts in a month? Will it really matter? I have about £10,000 that is getting nothing interest-wise in an ISA so I want to spread that over various high-interest-paying current accounts.

Thanks.

Archi_Bald

Hearsay suggests that applying for multiple current accounts in a short space of time doesn't matter at all. The searches will fall off your credit record within 6-12 months, anyway.

Definitely important bits are that you don't increase your available credit (don't apply for overdrafts) and not to get any defaults on the accounts.

Kim_13

Depending on which accounts you choose, you might not need to open 5. The TSB Regular Saver isn't subject to a credit search, so that's one rather than two.

There's the FlexDirect for £2,500 at 5%, £5,000 in Club Lloyds at 4% (but needs 2xDD's to be paid from it) and 3% on £3,000 in Tesco.

Alternatively the lot could go into Santander 123 for 3%, but that isn't as attractive with the monthly fee increasing from £2 to £5 in January.

dutchcloggie

I already have the 123 filled up with £20,000. Just looking for a way to maximise the remaining £10,000 which is currently in an ISA that is making me poorer, rather than richer. I have opened the TSB account and the saver (although I can only add to the saver in small amounts per month). I also have a FlexPlus with nationwide as a joint current account. I guess I could open a FlexDirect (which, since I am an existing customer will not require additional credit checks?) and stick £2,500 in there for a nice 5%?

Have I worked that out correctly?

MARTYM8`

Multiple applications are likely to affect your rating for a short time – depends on your circumstances.

If your mortgage application is in 12 months time then you should be fine – providers are more interested in recent credit applications. However with Noddle/Call credit the records of searches are kept for 2 years.

Your current accounts will however appear on your credit report and your mortgage provider will want to see your bank statements – maybe 1 month only sometimes 12 (depends). So having multiple accounts could complicate that. You then also have the monthly transfers in and out to get the interest – which gets messy with thousands flowing in and out.

I would be tempted therefore to limit your focus and avoid going for switch incentives but focus on interest earnings. Retain your old current account for your transactions/direct debits/rent etc and then apply sparingly and just use the new accounts for interest. TSB is a good one – only £500 monthly payment required plus the 5% regular saver. Tesco also allow you to open 2 current accounts paying 3% on up to £3k – and I gather they are waiving their £750 minimum payment in to avoid a £5/earn interest from next week. Neither require DDs and that should take care of £8k. You can then use these statements as evidence of savings. You could add a Nationwide flexdirect for 5% - but you need to pay in £1k a month for that.

All these switch incentives will still be around no doubt in a year – so I would apply for those post completion on your mortgage (albeit you may have some delay in getting on the electoral register once you move). As will presumably be the 6% regular savers with FD/HSBC/M&S.

colsten

dutchcloggie wrote: »

I also have a FlexPlus with nationwide as a joint current account. I guess I could open a FlexDirect (which, since I am an existing customer will not require additional credit checks?)

It will require a credit check.

If you are happy with joint accounts, why not double up with your partner? 3 TSB Plus and 3 Flexdirects will take £13.5K. So you can even move some of your 123 money into these.

Other than that, there are other 3% and 4% accounts.

Kim_13

MARTYM8` wrote: »

Multiple applications are likely to affect your rating for a short time – depends on your circumstances.

If your mortgage application is in 12 months time then you should be fine – providers are more interested in recent credit applications. However with Noddle/Call credit the records of searches are kept for 2 years.

Your current accounts will however appear on your credit report and your mortgage provider will want to see your bank statements – maybe 1 month only sometimes 12 (depends). So having multiple accounts could complicate that. You then also have the monthly transfers in and out to get the interest – which gets messy with thousands flowing in and out.

I would be tempted therefore to limit your focus and avoid going for switch incentives but focus on interest earnings. Retain your old current account for your transactions/direct debits/rent etc and then apply sparingly and just use the new accounts for interest. TSB is a good one – only £500 monthly payment required plus the 5% regular saver. Tesco also allow you to open 2 current accounts paying 3% on up to £3k – and I gather they are waiving their £750 minimum payment in to avoid a £5/earn interest from next week. Neither require DDs and that should take care of £8k. You can then use these statements as evidence of savings. You could add a Nationwide flexdirect for 5% - but you need to pay in £1k a month for that.

All these switch incentives will still be around no doubt in a year – so I would apply for those post completion on your mortgage (albeit you may have some delay in getting on the electoral register once you move). As will presumably be the 6% regular savers with FD/HSBC/M&S.

I wouldn't worry too much about the Noddle report. A lot of lenders don't seem to search it, only report to it. In the past 2 years I've upgraded a current account, opened two more, applied for an overdraft on one (separately to the application) and opened a credit card. None of those searched Noddle/Call Credit.

GMNN

I know it's not great to apply for several credit cards in a short amount of time, but what about credit card / current account applications combos?

I applied for an Amex CC this week, and would like to apply for another (different) CC in ~3 months from now. In between, I'd like to open some current accounts for savings like TSB/Nationwide.

Do current account applications affect my credit rating? How would that affect my chances of getting approved for that 2nd CC in 3 months from now?

Kim_13

GMNN wrote: »

I know it's not great to apply for several credit cards in a short amount of time, but what about credit card / current account applications combos?

I applied for an Amex CC this week, and would like to apply for another (different) CC in ~3 months from now. In between, I'd like to open some current accounts for savings like TSB/Nationwide.

Do current account applications affect my credit rating? How would that affect my chances of getting approved for that 2nd CC in 3 months from now?

Current account applications do leave a footprint on your credit file as the bank needs to ensure that it would be happy to offer you an unauthorised overdraft to some extent (since you can become overdrawn even if you don't request an overdraft.)

If I was in your shoes, I would open only TSB now (the reason being that you can also then open their 5% regular saver and put £250 in that per month, with only the one credit search for the current account.) You can then open Nationwide after the CC, or when the regular saver expires (whichever you prefer.)