multiple bank accounts for interest

datlex

jimjames wrote: »

To avoid confusion you might want to correct. I assume you mean £250 a week not month. Otherwise you'll fail to meet the monthly £1000.

yep thanks for being diligent and spotting the typo :-)

red_w

Just read through this and suddenly realised I'd been missing 'a trick' in not having money flow through a number of accounts to get interest.

Does raise one question, I assume that the money that flows should be in addition to a static amount to get maximum interest from each account, have I got that right?

So as an example in an attempt to see if I understand:
Acct1 pays 3% on up to £5k, and needs to receive £1K per month
Acct2 pays 2% on up to £10k, and needs to receive £500 per month
Acct3 pays 4% on up to £10k, and needs to receive £500 per month

If I pay £1K into acct1 each month and a week later pay £500 from it into each of the other two accounts that meets the qualification requirements.
Ideally, if I keep £5k in Acct1, £10k in Acct2 and £10k in Acct3 I will get max interest from all.

Have I understood the approach correctly?

bigadaj

If you really want to be super efficient then there's no need to wait for that week, set up the money out in the same day and ideally back to the original account it came from.

This can be done by faster payments or standing order, the latter may not flow on a weekend or holiday doe ending in how you set it up but the impact is minimal, and delays are only of concern where you could incur overdraft charges in accounts with minimal balances like Halifax reward.

TheShape

red_w wrote: »

Just read through this and suddenly realised I'd been missing 'a trick' in not having money flow through a number of accounts to get interest.

Does raise one question, I assume that the money that flows should be in addition to a static amount to get maximum interest from each account, have I got that right?

So as an example in an attempt to see if I understand:
Acct1 pays 3% on up to £5k, and needs to receive £1K per month
Acct2 pays 2% on up to £10k, and needs to receive £500 per month
Acct3 pays 4% on up to £10k, and needs to receive £500 per month

If I pay £1K into acct1 each month and a week later pay £500 from it into each of the other two accounts that meets the qualification requirements.
Ideally, if I keep £5k in Acct1, £10k in Acct2 and £10k in Acct3 I will get max interest from all.

Have I understood the approach correctly?

You could have Acct2 and Acct3 pay £500 each into Acct1, then have Acct1 pay £500 back to Acct2 and Acct3. You could do this manually or by SO. Or you could have an external account send the money to each account which then return that amount to the external account.

You could set up the SO to do all these things on the same day. The good thing about those accounts that will hold a large interest earning balance is that transferring a sum smaller than the total balance won't result in going overdrawn in the event of one or more of the payments being delayed.

Ideally, you want to minimise the time where the balance is over the limit that pays interest. You'd also want to take the interest out of the account once added if this also puts you over the interest earning amount. Some here even set up a SO for the interest amount to pay it on each month to another account.

Eco_Miser

red_w wrote: »

Does raise one question, I assume that the money that flows should be in addition to a static amount to get maximum interest from each account, have I got that right?

To answer the actual question: no.
It is possible to circulate money through several accounts, and have it return to the starting account on the same day. Since the interest is based on the daily closing balance, which doesn't change, you can still get the maximum interest, while never injecting more money into the system.