Standing orders - going into the red temporarily?

DragonQ

If I wanted to have standing orders between various accounts so that I don't have to do manual transfers each month, what would happen if I temporarily went "into the red" on one of those accounts?

For example, if I want to transfer £1000 to 5 different accounts from my Santander 123 account, and then all of those transfer the same amount back on the same day. I'd end the day in the black but would it still work and would I avoid charges even if I started with less than £5000? Or would some of the standing orders not make it?

Is it different for each bank? I know I could avoid this by having each SO on a different day, but some accounts have almost nothing in them so they could go into the red depending on which SO (in or out) completed first.

glentoran99

depends on the bank, I think nationwide give you until 14.30 on the day payment is due to correct and it not count as going into the red.


confused as to why you would want to do this though

YorkshireBoy

Unless you have an overdraft facility, Santander may block one or more of the transfers. You also may risk affecting your internal rating with Santander.

There are loads of other automated ways of shifting the cash if Santander is light of funds. For example...

1. Do two lots of SOs over the month for half the amount each.

2. Cross-fund in pairs, rather than using the hub and spoke method from Santander.

3. Set them all up for different days in the month.

DragonQ

YorkshireBoy wrote: »

Unless you have an overdraft facility, Santander may block one or more of the transfers. You also may risk affecting your internal rating with Santander.

There are loads of other automated ways of shifting the cash if Santander is light of funds. For example...

1. Do two lots of SOs over the month for half the amount each.

2. Cross-fund in pairs, rather than using the hub and spoke method from Santander.

3. Set them all up for different days in the month.

I see. I know I could just spread things around to avoid the Santander issue but I can't see any way of avoiding the issue of doing such transfers to/from an account with almost no money in it, apart from doing the SO out the day after the SO in.

YorkshireBoy

DragonQ wrote: »

I see. I know I could just spread things around to avoid the Santander issue but I can't see any way of avoiding the issue of doing such transfers to/from an account with almost no money in it, apart from doing the SO out the day after the SO in.

You didn't originally say "almost no money in" Santander. You said "less than £5,000".

Which accounts are you funding? And what's the balance in each?

DragonQ

YorkshireBoy wrote: »

Which accounts are you funding? And what's the balance in each?

Well I have a Nationwide FlexDirect with £0 and Halifax Reward with ~£100.

YorkshireBoy

DragonQ wrote: »

Well I have a Nationwide FlexDirect with £0 and Halifax Reward with ~£100.

I was working on there being 5 accounts involved!

You need to do these manually when you have the funds available in Santander (eg on payday assuming you're paid monthly).

I fund 3 of my Reward accounts manually, and have done since launch (nearly 7 years ago?). Once the Flex is over £1K you can do cross-funding same day £1K SOs shortly after payday (again assuming paid monthly).

agrinnall

DragonQ wrote: »

I'd end the day in the black...

That is a very big and dangerous assumption. You could very easily find that the money hasn't even arrived at the other account by the end of the day, let alone been successfully transferred back.

DragonQ

Thanks for the advice guys. I've set up SOs for accounts that always have cash in them (pseudo savings accounts) on different days and will continue to do it manually for the others (N/W Flex Account, Halifax Reward, etc.).

Vortigern

DragonQ wrote: »

I see. I know I could just spread things around to avoid the Santander issue but I can't see any way of avoiding the issue of doing such transfers to/from an account with almost no money in it, apart from doing the SO out the day after the SO in.

DragonQ wrote: »

Well I have a Nationwide FlexDirect with £0 and Halifax Reward with ~£100.

Try this:
Transfer £750 from Santander to Halifax 4-weekly on a Wednesday
Transfer back 4-weekly on a Thursday.
NB. These are 4-weekly standing orders, not monthly.

There are no Wednesday bank holidays till Boxing Day 2018, so your outbound payment will not be delayed and there will always be cash available for the return payment.

Advantage: you can automate the Halifax funding and save time.
Disadvantage: you lose a small amount of interest while £750 is out of Santander for 13 days each year.

Why are you keeping a FlexDirect with a zero balance? And why do you need to fund it regularly?

DragonQ

Vortigern wrote: »

Why are you keeping a FlexDirect with a zero balance?

For potential switching offers.

Vortigern wrote: »

And why do you need to fund it regularly?

I have no idea which of my two FlexDirect accounts Nationwide will "activate" with 5% interest in a year's time, so I just transfer in/out of both.