Deposit funds into savings account using debit card ???

darren72

Does anyone know of any savings accounts that let you deposit funds into it by using your debit card ? - Rather than bank transfer ?

Thanks in advance

EdGasketTheSecond

Most of them I should think. All National Savings accounts, S&S accounts; why wouldn't you be able to on any account?

darren72

EdGasketTheSecond wrote: »

Most of them I should think. All National Savings accounts, S&S accounts; why wouldn't you be able to on any account?

I have many different savings accounts and none of the ones I have will allow deposits by debit card - Nationwide, Charter Savings, Paragon Bank, Secure Trust Bank, First Direct....

I'll have a look at National Savings accounts. Thanks.

youngretired

I think Post Office and Kent Reliance allows deposits by debit cards.

bowlhead99

EdGasketTheSecond wrote: »

Most of them I should think. All National Savings accounts, S&S accounts; why wouldn't you be able to on any account?

Because if a slice of the cash deposited goes to pay transaction fees to the debit card network, and we are in a low-interest environment, the costs of receiving the money other than by their preferred method of direct bank transfer can be expensive in the context of the interest rate they also have to pay you. If you deposit £40 and they pay you 0.5% interest on it which is 10p interest every six months, but they have to pay 20p debit card transaction fee to even receive the money in the first place, you are twice as expensive as their 'normal' ideal customers.

If you don't mind going into a branch, many banks will however let you take out money on your debit card and then deposit it over the counter as part of their regular service offering.

Alexland

bowlhead99 wrote: »

If you deposit £40 and they pay you 0.5% interest on it which is 10p interest every six months, but they have to pay 20p debit card transaction fee to even receive the money in the first place, you are twice as expensive as their 'normal' ideal customers.

But if the cost is being absorbed into something you have already decided to buy into anyway where's the harm getting some extra Tesco Bank debit card points from your savings or investment deposit?

ceredigion

The Post office.
As a foot note, you can do it contactlessly,

noh

Yorkshire Building Society accept debit card payments to their savings accounts.

bowlhead99

Alexland wrote: »

But if the cost is being absorbed into something you have already decided to buy into anyway where's the harm getting some extra Tesco Bank debit card points from your savings or investment deposit?

Not sure I'm following you here (or perhaps I wasn't clear what I was getting at).

Edgasket said that most savings accounts should let you pay in by debit card; why wouldn't they? The answer to why wouldn't they, is that it is expensive for them to pay a transaction fee on pulling the money into your account.

You give them your debit card details and they request the £40 from your current account through the Visa network or whatever. They get the £40 but it costs them 20p to receive that money. So they only get £39.80. Yet you expect to see £40 in your savings account after the transaction. So, to keep you happy they would have to find 20p out of their own pocket. Which is as much money as they were going to give you for an entire year's interest at 0.5%. If you choose to withdraw the money after only a day, your account has cost them 365x as much to run as a typical person funding their deposits via bank transfer. Most banks do not want to offer the debit card deposit functionality to create such incredibly expensive-to-service customers.

It's not something you can equate with a shop selling you a shirt for £40 that they bought off a wholesaler for £5. The shop only gets £39.80. after paying the 20p debit card processing fee. In that case the shop has a choice of accepting debit cards and spending the 20p processing fee to get their £35 gross profit, or not accepting debit cards and incurring even higher fees when you pay with credit card instead, or missing out on the £35 gross profit entirely because you don't carry cash on you. So it's a no-brainer for that type of business to accept debit card as a way of their customers paying into their bank accounts on a successful sale.

But it isn't a no-brainer for a bank to accept debit card as a way of paying into a personal savings account, because the profit margin they'll make on keeping your £40 in the account for perhaps as little as one night, is closer to £0 than £35.

So, answering Edgasket's question, most banks don't let you pay into their savings account through a debit card network because it's not economical. So your follow-on question "...if the cost is being absorbed into something you have already decided to buy into anyway...?" doesn't come up, because the banks offering the savings accounts have decided they don't want to 'absorb' the costs of your method of payment. They don't want to just keep spending 20p to pull a few pounds into your account which you might choose to withdraw a few months or weeks or days or hours later, so they don't offer you the option of paying by debit card.

Someone like NS&I might allow paying in by debit card because they are basically the kind of place where customers typically deposit large sums or put money away for a long period of time, so paying 20p to acquire a customer deposit of £10000 for three years is fine. You are more likely to find it accepted there or at some of the building societies mentioned (whose raison d'etre was initially all about long term savings deposits and home-buying). Whereas Lloyds isn't going to allow it, because after you pay a few pounds into one of your savings accounts there, you might choose to flip it out into your current account and spend it or move it elsewhere on a whim, and they're more likely to be out of pocket on paying the 20p to receive that deposit.

where's the harm getting some extra Tesco Bank debit card points from your savings or investment deposit

Well, if the savings or investment firm has accepted your debit card deposit and paid the operating costs of doing that, it's no skin off their nose if your debit card provider happens to give you some points for a successful 'spend' on the card (unless the processing fee is higher for cards that pay points). No 'harm' to them at all.

But from Tesco's point of view it would make you an expensive customer. To encourage you to be involved in the Tesco Clubcard ecosystemthey offer a few points when you buy things away from Tesco (just at a much lower rate than when you buy things inside Tesco). They have an idea how much that'll cost them each year for an average customer. However, if you decide you are going to deposit £1k per business day into your savings account via debit card (and shuffle it out again yourself via bank transfers) then after a year at one point per 8 pounds 'spent', they'll have given you 30000 points over the year which is rather more than they want or expect to pay for typical customer acquisition/retention. And the bank offering the receiving savings account will have paid tens of pounds of processing fees to receive that money that you keep shuffling out of the account to put through again.

So, you would expect that if this became a popular thing to do, both Tesco offering the debit card, and the receiving bank which offers to accept the debit card payments, would take action to stop such abuse and expense for them.

Alexland

Thanks bowlhead99 I think you just convinced me to finally apply for a joint Tesco Bank account for the remainder of this year's ISA allowances. All my providers take debit cards. Should have done it last year really but too lazy.

MDMD

Tesco may not allow you to collect points on these sorts of transactions

https://www.tescobank.com/current-accounts/rewards/

Under “Points - What’s not included”

- If you use your debit card to pay for bills at banks or other financial institutions
- When you use your card to get cash. This includes cashback, in-store cash withdrawals and withdrawing cash at an ATM.

For instance my SIPP contributions have never gained me any points.