Maintaining my 123 account in credit

where_are_we

My Santander 123 current account is my main current account, and as such, acts as the "hub" to and from which all standing orders to numerous high interest current accounts and regular savings accounts takes place. Since Santander cut the 123 interest rate to 1.5% it makes sense to maintain a minimum workable balance in this account - all the other accounts pay greater interest. I realise I must keep the 123 in credit. The balance never goes below £3000 at the end of the day (I have set up a text alert for this). However, some days a lot of standing orders go out on the same day, amounting for example to 4 x £1000. Because Santander seem to do their standing orders very early in the day eg 01.02, before the "return" standing orders from the various high interest accounts come back in, my balance goes into negative territory for a few hours although by the end of the day it is back up to over £3000. No problems with this so far. Should I maintain a higher 123 balance eg £6000 for peace of mind?

eskbanker

Why not stagger the SOs to be on different days if you don't have enough balance within the 123 to accommodate all of them happening on the same day? Or split them to be £250 every week rather than £1000 every month, for example?

AndyPK

I only send 1x £1000 out of my S123 account, and cycle it around all the other accounts.

ceredigion

AndyPK wrote: »

I only send 1x £1000 out of my S123 account, and cycle it around all the other accounts.

The hub method makes life easier as you only need to login to one account to see if all the transactions took place.

surreysaver

ceredigion wrote: »

The hub method makes life easier as you only need to login to one account to see if all the transactions took place.

I agree. The hub method also means if the offer on one account finishes, there's only one set of standing orders that need cancelling, rather than setting up new ones and then waiting to make sure they all work.

surreysaver

I sort of have the opposite problem to the OP - I struggle to stop my 123 account from going over £20k. I have an offset mortgage with Santander, and they have a separate savings pot rather than having linked accounts like the other firms that have offset mortgages. The only trouble is, it takes one working day to move money to or from my mortgage account (it pays 1%), so when I get paid, or the cashback or interest get paid I can go over the £20k limit. What I have started doing is just FPSing any surplus to my Tesco Internet Saver for a day, then back again the following day to be paid into my mortgage.

eskbanker

surreysaver wrote: »

I sort of have the opposite problem to the OP - I struggle to stop my 123 account from going over £20k.

Have you tried Googling 'first world problems'?

surreysaver

eskbanker wrote: »

Have you tried Googling 'first world problems'?

That's the trouble with offset mortgages. I cannot help but borrow money at 1% and putting it in savings accounts which pay 2%. I also upped my monthly mortgage payments to £1000 to earn the maximum cashback.

AndyPK

surreysaver wrote: »

I agree. The hub method also means if the offer on one account finishes, there's only one set of standing orders that need cancelling, rather than setting up new ones and then waiting to make sure they all work.

I have set up StandingOrders and once I checked they worked the first month, just left them to work.

If one account finishes, it's no bother.