Extra multiple accounts- empty out or close?

hoc

I have a number of accounts from the easy high interest heydays which are really no longer worth the trouble following repeated interest cuts and in some cases additional requirements like direct debits. A good example would be my 3 Bank of Scotland accounts. In some cases it will no longer be possible to have multiple accounts such as the 2 TSB accounts I have.

What is the general MSE recommendation on what to do? I can close/switch or keep open with a few quid. I see benefits in both short and long term but can't decide.

EachPenny

My own approach is to close down the instant access type accounts that savings products mature into, but retain other accounts for a while (depending on circumstances) if there is no cost of doing so. I'd always keep at least one account going with each FI.

After April I probably won't need my 123 account or one of the BoS accounts, but neither will be closed. I'll downgrade the 123 to an Everyday account and the third BoS will be fed with a small SO once a month so it has some activity going on, even if the average monthly balance will be low.

I was in two minds about closing my 123 Credit Card last year when the cashback was reduced, but kept it running in an inactive state. I'm glad I did as I'm now hoping to be able to reactivate the account and start using it again.

For the same reason I'd also consider opening accounts which have some attraction, but possibly not fitting in with my current needs. For example the Natwest Savings Builder account is not an especially attractive account, but if I didn't have one I'd probably be applying for one before I switched or closed my NatWest current account. It has some uses and there's no telling when it might be withdrawn or made less attractive for new customers.

colsten

I am closing savings accounts as and when they no longer serve any useful purpose. For example, 5 of my 6 Tesco savings accounts will be closed when Tesco stop doing DDs. The 6th one stays for the time being as it has a decent-ish interest rate for an instant access account but see above.

Most of my interest-earning current accounts will remain for as long as I am able to meet the eligibility criteria for earning interest / rewards, either directly in the current account, or in a linked savings account. I also retain a few dormant current accounts in case another suitable switching offer appears. Another account I retain is my Nationwide FlexAccount, as it's one of the oldest accounts I have and as I value the free travel insurance that comes with it (no longer on offer for new applicants).

Like with so many things, it all depends on your personal needs and choices, and there is no single answer that applies to everybody.

hoc

Don't inactive accounts get flagged and eventually cause issues e.g. banks informing they will close your accounts?

I'm not talking about savings accounts, those are quite obvious and sensible to close. Something like holding onto a second and third BOS or second TSB account which in future may not be possible to reopen which I may then regret if one day interest rates ever go back up to 5% levels. But not if it risks getting a letter saying all my accounts with that institution will be closed as has been reported increasingly on here.

YorkshireBoy

hoc wrote: »

Don't inactive accounts get flagged and eventually cause issues e.g. banks informing they will close your accounts?

But they wouldn't remain inactive would they? You'd be cycling cash through them to keep them ticking over.

I still have an RBS Select potential donor account left over from the YB/CB bonanza 3 years ago. It didn't see any action for 2 years, but now sees the odd transaction now and again just to avoid any dormancy policy rules.

When I emptied several of my 3% current accounts (a few BoS and maybe a brace of Lloyds) a couple of years ago I carried on with the monthly funding merry-go-round. I even left my Tesco £750 credits going in each month, just to double up the activity levels.

Some of our YB CADs have been empty for a good while now, but they still see £1K a month passing through.

In short, I'd keep all the accounts you have now...because you've far more to lose than you have to gain by closing them.

hoc

My understanding was a small balance and small activity would cause issues. I have BOS accounts with 5k for the interest. I was planning to reduce balance to 50 quid and do a monthly SO of a fiver and occasionally spend but I'm not sure this is good enough. I don't want to cycle larger amounts.

YorkshireBoy

hoc wrote: »

My understanding was a small balance and small activity would cause issues. I have BOS accounts with 5k for the interest. I was planning to reduce balance to 50 quid and do a monthly SO of a fiver and occasionally spend but I'm not sure this is good enough. I don't want to cycle larger amounts.

I think you should close them, to save you inconvenience and worry.

18cc

If you do decide to close any of your current accounts you may find it easier to 'switch' them into an existing account rather than go through the hassle of actually closing it

The switch will close it for you and in my opinion applying for switch is much quicker and easier and trying to close an account down other people may agree or disagree