Meeting current account monthly criteria - can you do this?

JustAnotherSaver

Just wondering what other people do. There are current accounts out there that may or may not have direct debit requirements in order to get them to pay out their 5%, 3%, 2% etc interest rates.

They also may have minimum crediting fees. Some accounts may require £1,500 per month, others £1,000, some £750 and some £500.

Now i have 2 accounts sitting earning 3% each. I have them maxed out with £1,500 in each and i have a standing order set up where account A pays account B £500 and account B returns £500 to account A on the 1st of every month - job done & forget about it.

Then i just go in & manually extract the interest at some point.

But some accounts aren't worth having much in. Accounts that pay a reward for example rather than interest. For these i just have £1 in there & at some point i send the requirement over (manually) and cycle it through & bring it back.

Gets a bit tedious though. It's £60 at the end of the year which is £60 i wouldn't have had but doing it manually is a bit boring.


So i was wondering - could i send say (via SO) £1,000 from an account that actually has £1,000 in it to one of these, for one of these reward accounts to have a SO set up to pay the other £1,000 and for that one to then return £1,000 to the originating account (with a different bank).

So i guess initially those reward accounts would go minus balance but when it's all done with it will have ended the day as it started - £1 balance. Or will it not happen as it'll be sending it minus?


How do others deal with it all?

Neil_Jones

Key criteria is usually pay in £x a month (usually calendar month but not for Santander). This is easy to do by standing order. Doesn't have to stay in the account, just get paid in. My personal best is 45 seconds.

Note that most banks won't process standing orders if the payment date falls on the weekend, so if you set a payment to go out on the 1st and the 1st is the Saturday, it won't go until the next working day, typically Monday. If you then want the 2nd payment to go out on the 2nd and that's a Sunday, that'll go on the Monday too so there's a possibility you could get temporarily overdrawn but otherwise worst case scenario is a failed payment due to lack of funds.

Direct Debits on the other hand are slightly more difficult. Some will let you do it to and from savings accounts but most won't. However charity direct debits at £1 a month are available and can satisfy the requirements.

Vortigern

OP clearly has 2 TSB accounts, normally containing £1500, and 2 Halifax accounts that are normally empty.

One solution is to do the funding transfers manually, on the same day in quick succession.

Another solution is to transfer £750 from TSB to Halifax by standing order every 4 weeks on a Wednesday; then return the cash to TSB by standing order every 4 weeks on a Thursday.

This has the advantage of fully automating the process with no possibility of overdrawing the Halifax account or forgetting to make the transfers. You'll never have a payment delayed by a weekend or bank holiday until Boxing Day next year. There's a slight disadvantage in that you'll lose 13 days interest on £750 each year.

EachPenny

Vortigern wrote: »

This has the advantage of fully automating the process with no possibility of overdrawing the Halifax account or forgetting to make the transfers. You'll never have a payment delayed by a weekend or bank holiday until Boxing Day next year. There's a slight disadvantage in that you'll lose 13 days interest on £750 each year.

My own approach is a variant on this. I automate the transfer (by SO) from the account which is normally fully funded into the one which is normally empty (e.g. HSBC, M&S, Co-op, FlexAccount) so there is no risk of forgetting to make the payment in.

But I return the money by a manual FP, usually leaving enough to cover Regular Saving deposits, DD's and any payments. That way I can return the money same day if I want (depends if I have time, usually I do) or do it the following day. If I ever forget then all I lose is some days of interest. I'd do the same with Halifax, but with them I find it easier to just do a manual transfer with my BoS accounts.

YorkshireBoy

EachPenny wrote: »

My own approach is a variant on this. I automate the transfer (by SO) from the account which is normally fully funded into the one which is normally empty (e.g. HSBC, M&S, Co-op, FlexAccount) so there is no risk of forgetting to make the payment in.

But I return the money by a manual FP, usually leaving enough to cover Regular Saving deposits, DD's and any payments. That way I can return the money same day if I want (depends if I have time, usually I do) or do it the following day. If I ever forget then all I lose is some days of interest. I'd do the same with Halifax, but with them I find it easier to just do a manual transfer with my BoS accounts.

Ditto for me with HSBC & M&S for regular savers and Nationwide FlexAccount for travel insurance...SO in and manual out.

But I do manual transfers to 3 of my 4 Halifax Reward accounts from my 'main' salary receiving Halifax Reward account on payday in a 1-2-3-4-1 operation, leaving enough behind in each for the DDs.

With Co-op I do manual in and back out (2 hours later!) when I'm reminded by email that my Everyday Reward payment has been made.

Re the OP's TSB accounts...

Now i have 2 accounts sitting earning 3% each. I have them maxed out with £1,500 in each and i have a standing order set up where account A pays account B £500 and account B returns £500 to account A on the 1st of every month - job done & forget about it.

Then i just go in & manually extract the interest at some point.

It's not really "job done" if you then have to log in and spend time making transfers out from two accounts!

Maybe consider fully automating with SOs, eg...

£500 TSB1->TSB2
£504 TSB2->TSB1
£8 TSB1->wherever

I take the same approach with 3 x BoS. All they then need is a quick log in to check the balances are between £4,999 and £5,001. That'll do for me.

JustAnotherSaver

YorkshireBoy wrote: »

Re the OP's TSB accounts...It's not really "job done" if you then have to log in and spend time making transfers out from two accounts!

Maybe consider fully automating with SOs, eg...

£500 TSB1->TSB2
£504 TSB2->TSB1
£8 TSB1->wherever

I take the same approach with 3 x BoS. All they then need is a quick log in to check the balances are between £4,999 and £5,001. That'll do for me.

Except it really is ... depending on what "the job" is.

If the job is just doing what i have to do to get that interest then the job is done. Once it's been obtained then it's yours.

I could set up a SO for an amount out on the 2nd of the month but then i don't know what the interest due each month is. I know it'll be roughly this or roughly that but i prefer to be exact with it.

I also know some people get a bit uppity here when you start mentioning what you do with what bank account so since we're all freely discussing it...

I have the max in the TSB account (x2), i have a Club Lloyds and a joint Club Lloyds with my wife (who also has a solo Club Lloyds account). We have a Halifax Reward each as well as a joint. HSBC is our main. We have Flex Direct 1st accounts each as well as a regular saver which is funded from the Lloyds.
I had Bank of Scotland but i've just sent off a letter to close all except one of them.
I have Tesco accounts for the D/Ds. Oh and currently a Nationwide FlexDirect and FlexAccount.


I keep enough in the Halifax for example (£3 each) so that the D/Ds are taken on the 1st of the month (or 1st available day) which knocks the balance then to £1.00.
I have to manually go in to my Tesco account to set up a payment to transfer the direct debit money back to the required accounts which i usually do somewhere around the 25th of the month thereabouts. I could do charity payments but i prefer to keep my money. £2 per account per month adds up.


So right now TSB takes care of itself. I'll pay my second account which will pay my wifes 1st account which pays her 2nd account and then back to my 1st account.
Same with Lloyds although i'm having to watch Lloyds as with the First Direct regular savers i think one of the accounts may be getting close to being under £1,500 now.
Then i have to manually at some point take £1,000 from my wages account, put it in to Halifax, over to Nationwide, back to Halifax joint, over to Nationwide (other), over to wife's Halifax, over to her Nationwide and then back to our wages account.

All a bit of a faff.

I do pretty much the same for my mother, brother & sister. They know all about it, they trust me fully and i enjoy helping out. Yes many will say they should do it themselves, maybe they should but if left to themselves they'd have 1 current account, 1 savings account, no retirement plan and like i said - i actually enjoy helping people if i can especially family members.

I was just looking for a way to make it easier really, that's all.


And since we've detailed what we're doing openly, watch 2018 have more restrictions regards meeting criteria as banks read this post but hey it's nice while it lasted

clivep

I've been a bit cautious. Where there is an insignificant sum in the a/c then I've set the standing orders 5 days apart so I don't have to worry about bank holidays. The lost interest is less than £10 a year so worth it for the convenience.

Current a/c standing orders:

5th £750 BOS to TSB.
5th £750 TSB to Nationwide FlexDirect Joint
5th £750 Nationwide FlexDirect Joint to Coop
10th £750 Coop to M&S
15th £250 M&S to M&S Regular Saver
15th £250 M&S to NatWest (for utility DDs)
15th £250 M&S back to Coop
20th £250 Coop back to M&S
25th £250 to Nationwide Flexaccount Joint
1st £250 Nationwide Flexaccount Joint to Nationwide Regular Saver

Also,
15th £1,000 each way between Tesco
15th £1,000 each way BOS - Nationwide FlexDirect Sole

All Tesco savings DDs have been replaced except those for Yorkshire Bank which I'll cancel after the £250 is received. DDs in place from savings a/cs with BMx2/POx2/SWx2 + local credit union.

Duplicated for my wife so FlexDirect Joint funding achieved. Small amount of other income paid into Flexaccount Joint ensures the £750 required for the free travel insurance.

Credit card payments come out of our BOS a/cs near the beginning of the month so it's all automatic and I just need to fund our BOS a/cs from other savings once a month.

Be aware that if you do make it all automatic you may still heve to log into you account in order to qualify for rewards/interest. e.g. with Coop you only get the £4 reward if you log in at least once in the calendar month.

JustAnotherSaver

Clivep - that was my concern, how much interest you're throwing away from leaving amounts in accounts until the next business day. I don't know how to calculate it all as I'm not as good as some people here so that's another reason I've been doing it all manually.

clivep

In my case I'm moving £750 10 days early then £250 15 days early (approx.)

£750 for 10 days is equivalent to £250 for a month
(3 x the amount for one third the time).

£250 for 15 days is equivalent to £125 for a month
(2 x the amount for half the time)

£250 + £125 = £375 money not earning interest each month.
This happens every month so annually I'm missing out on interest on £375.

My best ad-hoc savings a/c is currently 1.45% with BM so I'm losing £375 x 1.45% = £5.44/year interest.

Same for my wife so less than £1/month between us.

Certainly less than getting unpaid transactions charges if I forgot to do something at the right time.

camaj

Does anyone have a method for cycling that's better than this:

Bank B:Pay in £1000 from Bank A - S/O for £1000 to Bank C
Bank C:S/O to Bank D for £1000
Bank S/O to Bank A for £1000

badger09

camaj wrote: »

Does anyone have a method for cycling that's better than this:

Bank B:Pay in £1000 from Bank A - S/O for £1000 to Bank C
Bank C:S/O to Bank D for £1000
Bank S/O to Bank A for £1000

There is an almost infinite number of possibilities;)

Some people automate everything in a chain, much as you suggest.

Others use automated 'hub & spoke' eg Bank A is 'hub' which feeds Banks B, C D etc with every payment from A being paid back in.

Some do everything manually on one day a month, others use a mix of automated & manual payments.

A couple of things to remember if you want to automate the process:

money doesn't haven't to sit in any account longer than a few seconds before moving elsewhere

some banks process SOs over the weekend and Bank Holidays while others delay payment until the next working day

accounts which you run with minimal balance could slip into overdraft:eek: if your outgoing SO leaves before the incoming one arrives

the interest you lose by playing safe (see above point) is minimal