Leaving Cahoot for new TSB account?

martyp

Hi all,
I'm really tempted by the new TSB account with the 5% interest and £100 welcome.
Here's my situation...
I've been with Cahoot since about 2001 when they offered an awesome overdraft allowance. I had a savings account also which I took all the money out of when the current account was getting more interest. Last year they stopped paying interest altogether but also made the online service better. I've had no real problems with them, their customer service has been great for me when needed.
I also have a stale Tesco savings account getting about 0.6% interest. If I put both accounts together it would total over £2k at the moment.
The TSB account seems perfect, I think about the £100, interest hopefully equalling £100 with the new savings changes in April as well as the 5% cashback.
My predicament is losing the Cahoot account as there is a £100 overdraft buffer and something like 16% interest then up to £2k.
I've had an unstable period of work the last few years and dipped into my overdraft a few times but at the moment I'm in good standing about 8 months into a perm job and with a recent tax rebate but you just don't know.
I've also read suggestions and rumours about Cahoot trying to ditch their customers (not taking any new, 0 interest etc.). My thoughts also are that having my money with them they would get the benefit and I get nothing?
I do also like their cheque by post service, it's been great.
I'm trying to convince myself that switching to TSB is right thing to do, it would be good if I could keep the Cahoot account for the benefit of the great overdraft if I ever need it but switching I'll lose that account if I want the £100 bonus. I did consider opening another account just to switch from that and close it or something.
Also there's nearly £2k in an ISA which I considered I could move to the TSB savings account if I switched.
Can anyone suggest anything please? Not sure whether to boost what I have or prepare more for the worst.

colsten

Not sure Cahoot are members of the CASS, so you might not be able to qualify for the switch bonus.

I any case, before you can switch, you must have an account to switch to. Thus your [STRIKE]first[/STRIKE]second step should be to apply for a TSB Plus account (using the link on MSE, even if you don't end up using the switch). When applying, you can specify whether you want an overdraft - - although I am confused, are you looking for an overdraft, or an account that pays you interest on your balance?

Your first step should be to check what your credit file says. You can check for free on noddle.co.uk. If it needs cleaning up, do that before you apply for anything.

You are allowed to have as many current accounts that you get accepted for, so you can keep your Cahoot account if you wish. Moving you ISA out of the doldrum interest account would be a very smart move BUT don't move it to another doldrums savings account! Move it to a current account that pays interest, and may be drip-feed a regular saver. Best rates: https://forums.moneysavingexpert.com/discussion/5374614

EDIT: The 5% TSB account isn't really "new" - - many of us here have had it since March 2014, when it was first launched. You could probably have made 5% on your ISA money for almost 2 years by now. It pays to keep an eye on the forum as anything new and exciting will be discussed here as and when it happens.

martyp

Many thanks colsten, much appreciated.
I do remember Cahoot being one of the last banks to go to FPS so wouldn't surprise me if they hadn't gone to CASS yet. I did check and Santander is listed but Cahoot isn't, unsure if Cahoot is covered under Santander in that respect.
Thanks for the Noddle link, I hadn't got round to using one of the new free ways of accessing my credit report. It says 5/5 and 647, not sure how that rates exactly.
It's a shame you can't get an account with good overdraft and credit interest. At present as I have under £2k in credit (and hope it stays that way) I'm thinking I should get more money on that. When I thought about it if I did get a £6 charge for going overdrawn it would be likely to be a much less frequent occurrence than when I'm in credit so would weigh up little against the benefit of the in credit balance. When I have been overdrawn in the last few years it's been for a few days generally at most.
I realise how much of a rut I've been in with my bank accounts now and trying to rectify my mistakes. Thing was I was unemployed from July 2014 to May 2015 so didn't have the money going into my account that was needed for many of the accounts.
One thing I don't quite get with the connected savings account, do you have to put a minimum of £25 in each month? So can I set up the SO for £25 each month and if I need the money in my current account just transfer it back in there?

colsten

martyp wrote: »

It says 5/5 and 647, not sure how that rates exactly.

banks won't use those ratings but they are an indication that nothing is critically wrong on your credit history. Good news.

martyp wrote: »

It's a shame you can't get an account with good overdraft and credit interest. At present as I have under £2k in credit (and hope it stays that way) I'm thinking I should get more money on that.

I might misunderstand what you are saying but I think you have lost me there - why do you want a huge overdraft facility? Why do you want an overdraft facility at all if you have savings?

martyp wrote: »

Thing was I was unemployed from July 2014 to May 2015 so didn't have the money going into my account that was needed for many of the accounts.

you don't need a regular income to service current accounts that you use as savings accounts. You just use existing money. For example, if the minimum monthly deposit is £500, you can simply withdraw £500 (or 5 x £100) and just deposit the money again.

martyp wrote: »

One thing I don't quite get with the connected savings account, do you have to put a minimum of £25 in each month? So can I set up the SO for £25 each month and if I need the money in my current account just transfer it back in there?

You need to check the T&Cs, but as far as the TSB Monthly Saver is concerned, I think you are right. Hope you can put at least £25 away each month!

martyp

Thanks colsten, I called TSB and spoke to a very enthusiastic and helpful lady who happily answered all my questions. She looked into whether Cahoot was valid for the switch and she confirmed it would be as the sort code comes under Santander. I'm hoping that definitely is the case, she put me on hold for a few minutes to find out. Would I have a come back on them if it turns out they can't do it and give me £100?
She also told me a few other things I couldn't quite confirm from information elsewhere on here or their site:
You get 3 months interest free overdraft after switching
There is the £6 monthly charge but the OD interest rate is about 1.6% per month or something which didn't sound too bad.
The 5% interest on the current account is for the forseeable future but only 12 months from account opening for the savings.
Interest paid monthly on current account, annually on savings
You have to pay at least £25 a month into the savings account but free to withdraw as much and often as you want (just won't get the interest on the amount you withdraw).
Also, if you don't pay £25 into your savings account or £500 into the current account apparently the only penalty is that you don't get the interest for that month.
She didn't indicate a limit on what you could have in the savings account for the 5% interest gain...
Much of the above is no doubt the norm for these accounts but clarified some things I was unsure of.

With regards to your responses:

colsten wrote: »

banks won't use those ratings but they are an indication that nothing is critically wrong on your credit history. Good news.

Thanks, it was good to see I was in good standing I don't think I've ever missed a payment for pretty much anything.

colsten wrote: »

I might misunderstand what you are saying but I think you have lost me there - why do you want a huge overdraft facility? Why do you want an overdraft facility at all if you have savings?

That is true, I was just scared to touch the money in my ISA for losing the interest and I went overdrawn because I didn't plan for money going out properly and several big outgoings caused my balance to drop into the OD. I quickly transferred some money from the savings account. If I go to the TSB account I'll close the other savings account and have both accounts into one. I might also close the ISA (fixed at 1.6% for 1 year) to put the money in the TSB savings account especially after April although wonder what the interest will drop down to after 12 months?

colsten wrote: »

you don't need a regular income to service current accounts that you use as savings accounts. You just use existing money. For example, if the minimum monthly deposit is £500, you can simply withdraw £500 (or 5 x £100) and just deposit the money again.

Good point, hopefully I won't be in that position again but with my rocky employment history I can never be sure.

colsten wrote: »

You need to check the T&Cs, but as far as the TSB Monthly Saver is concerned, I think you are right. Hope you can put at least £25 away each month!

Hopefully - I had a direct debit of £10 a month going from my 0% interest Cahoot account into my 0.6% interest savings account. I've now seen the light, just wish I'd switched sooner!:doh:

colsten

martyp wrote: »

She didn't indicate a limit on what you could have in the savings account for the 5% interest gain...

it is simple. The max you can pay into this account is £250 a month, and it 'morphs' into an account with a totally derisory savings rate after 12 months into which you could deposit a million or so. But you don't want to keep that account for more than 1 day.

martyp wrote: »

I might also close the ISA (fixed at 1.6% for 1 year) to put the money in the TSB savings account especially after April although wonder what the interest will drop down to after 12 months?

as above, it's a ridiculously low rate.

What you want to do is take the entire balance and put it into another interest paying account. For example, a Tesco current account. Get that account ready at least a week or two before you need it.

Then you open a new 5% TSB Monthly Saver, and drip-feed up to £250 into it again.

Rinse and repeat every year, for as long as TSB offer a decent rate. If they stop it, look elsewhere for a similar deal.

martyp

colsten wrote: »

What you want to do is take the entire balance and put it into another interest paying account. For example, a Tesco current account. Get that account ready at least a week or two before you need it.

Then you open a new 5% TSB Monthly Saver, and drip-feed up to £250 into it again.

Rinse and repeat every year, for as long as TSB offer a decent rate. If they stop it, look elsewhere for a similar deal.

Sounds like a good plan, will see how things go. Thanks for the advice