Funding First Direct through Monthly Transfer

nkbish0p

Hi All

In order to obtain some short term "easy" cash, I am intending to open a new First Direct account by closing a dormant account that I have with Halifax. I only opened the Halifax account a couple of years ago solely to earn £125 as a new customer.

The First Direct account will earn me £125 providing I fund it with £1000 on a monthly basis. I plan on using one of my "main" Nationwide current accounts to transfer cash in for this purpose.

Does anyone know if this will work? I think £125 is pretty much the best opening bonus without moving direct debits - please correct me if this is wrong though. I would also aim to make use of the First Direct regular saver to earn 5% interest.

YorkshireBoy

Yes it will work.

You only have to fund it once (with £1K) though to get the incentive, don't you?

The FD offer can be beaten by HSBC, who also have 5% regular saver (albeit with £50 a month less allowed). Like FD, no DDs are required...a pair of SOs will suffice.

nkbish0p

I assume I can set two standing orders to simply transfer funds back to my Nationwide account?

YorkshireBoy

nkbish0p wrote: »

I assume I can set two standing orders to simply transfer funds back to my Nationwide account?

Yes, but you might want to allow a few days for the return, unless you get a >£300 overdraft facility.

Is there a HSBC equivalent to the First Direct saver that pays 5% interest as I would also fund this if I went FD

Haven't I already told you there is? If you want further confirmation, it's on the HSBC website.

raising an additional £150 each year

FD would get you £97.50 (for £300 per month) wouldn't it? How did you get £150?


EDIT: I see how you've got £150 now. You were working on £250 a month and thought you'd earn interest on money you hadn't yet deposited!

nkbish0p

Sorry I made a bit of a mess with multiple edits!!

I think the best plan then is to open an account with HSBC, which needs funding of £1750 per month which can come from my Nationwide account

This should net me £150 immediately provided the account I close to open this has two standing orders - therefore I need to set these up in my Halifax account now sending cash to my Nationwide account so these are there for the transfer

This will also net me £50 12 months later if I continue with the funding of £1750

I would also open the HSBC saving account that pays 3% on up to £250 deposited each month - this is a further £45 per year

This gives a total of £245 for not too much effort.

If I open another basic account with no reward somewhere else I guess I could also look into using this to open a First Direct account later in the year.

YorkshireBoy

nkbish0p wrote: »

I would also open the HSBC saving account that pays 3% 5% on up to £250 deposited each month - this is a further £45 £81.25 per year

This gives a total of £245 £281.25 for not too much effort.

Looks much better now doesn't it.

Norscbu

hsbc pays 5% on their regular saver (for advance accounts). so a potential £81.58 interest for the year.

nkbish0p

Thanks both.

Perhaps my interest calculations are out... Funding of £250 per month gives a final position of £3000 after 12 months. If £250 is paid in "even" payments, the average balance on the account over the year is £1500, 5% of this is £75

I assume this is due to your calculations assuming the "opening position" is a deposit of the first £250 though

YorkshireBoy

nkbish0p wrote: »

I assume this is due to your calculations assuming the "opening position" is a deposit of the first £250 though

Correct, it skews the average balance. 1st payment is in 12/12ths of a year, 2nd for 11/12ths, and so on, giving...

12/12 + 11/12 + 10/12 +.........3/12 + 2/12 + 1/12 = 78/12 = 6.5

£3,000 x 0.05 / 12 x 6.5 = £81.25

The actual amount may differ by a few pennies, depending on your start date.