Switching Bank Accounts

LiamV89

Hello everyone


I have a questing about the current account switching service many banks are offering and the rewards for doing so.


But first here is a breakdown of our current set up
My girlfriend and I bank with three banks, with six accounts in total

Both of us have our wages paid into our individual Halifax Reward Current Accounts and receive £5 a month for doing so. From there we each send £500 to do the rounds on our three TSB accounts to claim the 5% interest on the balances we hold in them. Finally the money ends up in our Santander 123 account where the bulk of our money stays to pay off the bills. On top of this we use Interest free credit cards from Halifax and Santander. The TSB accounts are solely used for holding savings.

Other than the mortgage we are debt free, credit cards are interest free and are under control.

I would like to take advantage of the First Direct £150 switching bonus (£300 for two accounts) in place of the £5 a month per Halifax reward account which I’ve held for a few years now.

My question is, how long would I have to use the First Direct current account for?

What’s stopping me from switching to another bank in X months time?

Is there some sort of cooldown period on closing and reopening current accounts in general? Or is it something that could affect my credit score? Bearing in mind I already have multiple accounts and cards and have never been rejected for credit.

I'm thinking of reopening the Halifax account again once I've switched to First Direct claim the £5 a month again.:D

YorkshireBoy

Open another sole Halifax account each, and switch those instead of the Reward accounts. There...saved you £120 a year on that one.

Why no joint Reward account? There...made you another £60 a year on that one.

Why save at 3% in Santander when between you, you can get £7.5K @ 5% AER with Nationwide and £15K @ 4% AER with Club Lloyds. You haven't said how much is in Santander so I can't put a value on that.

I should be on commission!

To your questions...

My question is, how long would I have to use the First Direct current account for?

How long before you get the £150? The answer to both is the same.

What’s stopping me from switching to another bank in X months time?

Probably nothing!

Is there some sort of cooldown period on closing and reopening current accounts in general? Or is it something that could affect my credit score? Bearing in mind I already have multiple accounts and cards and have never been rejected for credit.

If you don't NEED credit or an upcoming mortgage application, then worry not!

lynnejk

YorkshireBoy wrote: »

........

Why save at 3% in Santander when between you, you can get £7.5K @ 5% AER with Nationwide and £15K @ 4% AER with Club Lloyds. You haven't said how much is in Santander so I can't put a value on that......

Surely that depends on how much the OP is getting in cash-back from Santander each month ?

YorkshireBoy

lynnejk wrote: »

Surely that depends on how much the OP is getting in cash-back from Santander each month ?

Why? OP would still get any cashback due on their bills.

Let's assume they get £7.40 cashback and £18.85 interest* on £7.5K each month. If they shift the cash to Nationwide they still get £7.40 cashback but now get £31.15 interest*. That's a gain of £12.30 a month...£147.60 over the year.

If they're getting less than a fiver cashback each month, then until they've filled all the other 4/5% accounts they shouldn't even have Santander 123 (as a savings account) in their portfolio...but a lot of people do, for 'ease'.


* All figures gross.

colsten

lynnejk wrote: »

Surely that depends on how much the OP is getting in cash-back from Santander each month ?

It is nigh on impossible to beat 4% and 5% [and 6%] accounts with cashback from Santander accounts, because the monthly account fee knocks off a substantial amount of, or even negates, the cashback.

Eco_Miser

LiamV89 wrote: »

I would like to take advantage of the First Direct £150 switching bonus

What’s stopping me from switching to another bank in X months time?

Possibly the 6% Regular Saver having the FD current account entitles you to?

You could open another account for further switches.

LiamV89

Thanks for the replies I'll post more in depth later.

Any unsure how switching Halifax to Halifax saves me £120?
The reward account has no fee. that's the Ultimate reward account which is naff.


Santander pays us more in than the fee by the 1% 2% 3% interest on bills and shopping as we use the creditcard for absolutely everything.
Meeting the requirments of all the accounts can be tricky. For example having 2 active directory debits.

colsten

LiamV89 wrote: »

Santander pays us more in than the fee by the 1% 2% 3% interest on bills and shopping as we use the creditcard for absolutely everything.

are you confusing the current acount and the credit card? Current account can pay interest on your balance as well as 1/2/3% cashback on certain Direct Debits. The credit card pays 1/2/3% for purchases at certain retailers. Both cost steep monthly fees and most people can get better deals elsewhere.

LiamV89 wrote: »

Meeting the requirments of all the accounts can be tricky. For example having 2 active directory debits.

It's not actually tricky to get DDs. Read about on the forum to learn more about multiple current accounts and meeting the requirements.

YorkshireBoy

colsten wrote: »

are you confusing the current acount and the credit card?

It seems the OP is unaware that he can hold the credit card in isolation, ie it's not necessary to hold a 123 current account to hold a 123 credit card.