Let it go over £5,000 or keep it under?

Helen28

I have a Vantage bank account into which all my income is deposited.

Any amount over £5,000 is immediately transferred out to my Santander 123 account.

Now that the interest rate is the same with both accounts should I transfer the amount that I know is going to put it over £5,000 out before that amount goes in?

i.e I know that every fourth Friday I am going to get £1,100 deposited and I transfer it out after it has been deposited.

Should I, instead, on the day before, transfer £1,100 to my Santander 123 account so that there is never more than £5,000 in my Vantage account?

I also have a weekly deposit of £50 as well.

TheShape

If you transfer it out on the same day your balance exceeds £5000 then you lose no interest anyway as you'll earn it in the 123 account on the same day.

You could reduce the average running balance in the BOS to a level where the £1100 normally doesn't put it over the £5000 balance to save having to shuffle the money around.

Terry_Towelling

Presumably you run your BOS account at £5K all the time to maximise your return and it never drops below this level??? If so, you could just ask your employer to pay your income into your Santander account instead.

At the end of the day, the loss of interest on £1100 for a day is only about 4.5p.

Helen28

If so, you could just ask your employer to pay your income into your Santander account instead.

That is the funding that has to be paid in every month.

AndyPK

try and do a standing order if you can.

It's then automatic at midnight.

Armorica

AndyPK wrote: »

try and do a standing order if you can.

It's then automatic at midnight.

Standing orders are typically processed between 2am and 6am.

Terry_Towelling

Helen28 wrote: »

That is the funding that has to be paid in every month.

Understood. As long as your Santander account balance is above £1000 (which it would always be immediately after having your salary paid in there) you just arrange a same-day switch between the two accounts for £1000 by standing order. That takes care of the BOS and Santander funding requirements, ensures the BOS balance stays at £5K (or less if your bills come out of there) and means you don't lose any days interest in either account.

Do you have the Santander account that pays 1.5% up to £20K for £5 pm with a £500 pay-in and 2DDrs? If so, and if you have less than £20K in your accounts, you could ditch the BOS account and just run everything through Santander. Your overall interest would be the same and you'd still be paying the same £5 pm fee.

You could then think about getting a Nationwide FlexDirect account to get even more interest (for a year at any rate). Just a thought.