Possible ‘loophole’ to double your interest?

NoviceAngel

Hi All,

I’ve stumbled on an oddity that could possibly mean you could get interest paid twice on the same money in one day, let me explain ....

I know that most if not all interest paying current accounts pay interest on the balance on closure of the banks working day. That’s why you get paid interest from the day you deposit cash funds but not on the day of withdrawal.

I’ve noticed that not all banks use midnight as the switchover from one day to the next, I know for instance that Bank Giro Credits, sometimes even Direct Debits are showing up on my Santander 123 account as early as 9pm but obviously dated the following day. So all that seems ok and seems to make sense. (Apologies for still having a 123 account-I know I’m in the process of downgrading it)

So interest at 1.5% of the balance at close of business let’s say is 5k. Here’s a glitch if you pay at 9-10pm from Santander to for example Club Lloyds then Lloyds typically use a much later end of day routine and it is still todays date that the money would be credited not the following day.

So effectively you would get paid two lots of interest on your money the first from Santander and then from Lloyds.

All the above is theory, I’ve been testing it over a few days and it does appear to work. It would possibly work with other banks too depending on the time that they end the day and start running the following days transactions.

I do realise it’s not very practical but I suppose if you were that much of a money saver, it may well be possible.

I’d like to know if anyone can follow the above or explain why it wouldn’t work, all I can say is it does appear to work between Santander and Lloyds, I’ve also tried it with larger amounts to the Halifax but dumped it into an instant saver, again appears to work.

I really don’t have the time and inclination to shift £££ around everyday and it’s just something I’ve stumbled on by accident.

I’d welcome any comments,

Cheers,

NoviceAngel

deutsch

I appreciate the effort to explain but I'm lost.

I will follow this thread with curiosity though

NoviceAngel

deutsch wrote: »

I appreciate the effort to explain but I'm lost.

I will follow this thread with curiosity though

Perhaps I didn’t explain it well I’ll have another go. Dates and times made up to demonstrate.

1/10/18. Time 21:15 balance at Santander £5k
Santander run end of day routine on the accounts so any further transactions on the account will be dated the 2/10/18. Therefore interest is paid on your balance 5k on the the 1/10

1/10/18 Time 21.30 you transfer 5k out of Santander into Club Lloyds that goes in on the 1/10/18 via faster payments.
Lloyds then run their end of day routine at midnight, they see you have 5k in your account and pay you interest for the 1/10/18 - just like Santander did a few hours ago.

I hope that example makes things clearer and doesn’t make understanding this harder!;)

deadendwaterfall

I think I could navigate spaghetti junction quicker than I could make sense of your loophole explanation. :eek:

ceredigion

Over a weekend, just saying.

NoviceAngel

ceredigion wrote: »

Over a weekend, just saying.

You’re quite right, not sure what would happen over a weekend, abviously no DDs or SOs processed but I think faster payments and ATM withdrawals are still processed in real time, so it might still work.

Apologies to others, that can’t follow this, I can’t explain it any clearer so it can’t be for you.

SnowTiger

NoviceAngel wrote: »

I’ve stumbled on an oddity that could possibly mean you could get interest paid twice on the same money in one day, let me explain ....

IIRC this has been mentioned here before.

Biggest downside is that you're likely to find you cannot access your accounts one day and you'll be told they're under review.

You'll then be asked to explain why you're shifting thousands of pounds through them every day.

Then you'll get letters telling you your accounts are being closed.

NoviceAngel

SnowTiger wrote: »

IIRC this has been mentioned here before.

Biggest downside is that you're likely to find you cannot access your accounts one day and you'll be told they're under review.

You'll then be asked to explain why you're shifting thousands of pounds through them every day.

Then you'll get letters telling you your accounts are being closed.

Thanks SnowTiger, I’m glad at least one person follows it, yes I thought it would look very suspicious, but technically I can’t see how you could be breaking any banking rules, but I would expect that reaction for the banks, I’m glad I’m not the first person to spot this end of day routine anomaly.

NoviceAngel

I only spotted this by chance and it’s news to me, I really couldn’t be bothered logging in every evening testing if the end of day routine in underway and then shifting £££ and as SnowTiger pointed out having to explain all this to the banks, as they wouldn’t be pleased.

It’s interesting that it does work though, I know Santander change their end of day time almost daily but it seems always to be before midnight, whereas Lloyds is always after midnight.

zerog

I and many other people did this for years, but I stopped doing it in 2015 because

1) interest rates have dropped so much that the returns are no longer worth it. It takes about 20 minutes every day. Internet banking sites are clunkier than before, now that they want to load 1MB of scripts every time, so it's slower. Apps are faster but doing everything on one small screen leads to confusion (see point 4).

2) some people started reporting on here that their accounts were being closed.

3) banks are getting more paranoid about fraud and large transfers can often be held up, or require you to call their "fraud centre" and explain yourself.

4) you need to set an alarm for 8.05pm every day (except Sunday) and be organised enough to know what you are doing so that you don't do it at the wrong time. If you are out and can't do it, then you need to make sure your money is in the right bank earlier in the day.

One mistake and you might wipe out 1 months' work.

adindas

zerog wrote: »

I and many other people did this for years, but I stopped doing it in 2015 because

1) interest rates have dropped so much that the returns are no longer worth it. It takes about 20 minutes every day. Internet banking sites are clunkier than before, now that they want to load 1MB of scripts every time, so it's slower. Apps are faster but doing everything on one small screen leads to confusion (see point 4).

2) some people started reporting on here that their accounts were being closed.

3) banks are getting more paranoid about fraud and large transfers can often be held up, or require you to call their "fraud centre" and explain yourself.

4) you need to set an alarm for 8.05pm every day (except Sunday) and be organised enough to know what you are doing so that you don't do it at the wrong time. If you are out and can't do it, then you need to make sure your money is in the right bank earlier in the day.

One mistake and you might wipe out 1 months' work.

Considering the work needed to be done, you are talking about a very tiny amount of money here with a possibility your account beeing locked and / or closed.