No interest on balance over £5000, when do you transfer the excess out?

Retiredin2009

Like a lot of people I have a BoS Vantage current account that only pays interest up to a balance of £5000.
Because I have 6 income payments and 4 outgoing payments every month the balance fluctuates widely.
However the outgoing payments are less than the incoming payments so at the end of the month the balance will be over £5000, sometimes up to £6000 if I do nothing.
When do you transfer the excess over £5000 out of the account, once a month, twice a month or whenever the balance will be over £5000 for more than a day?
For instance if an incoming payment on a Friday puts the balance £600 over but on the following Wed a withdrawal of £700 will make the balance £100 under do you transfer £600 out on Fri. then transfer £700 back on Wed while knowing that on Thurs there will be an incoming payment of £200 then an outgoing payment next Mon of £400?
I also have an easy access savings account paying 1.34% interest

eskbanker

It's entirely up to you, you could micro-manage it to keep it at or close to £5K every day (to optimise interest) or just do it whenever you can be bothered (which is unlikely to cost you vast amounts of lost interest at 1.34%).

Notepad_Phil

Given that the 1.34% savings account you have pays more interest than the vantage, then unless there is some difficulty that I'm not aware of, I'd keep just enough money in the vantage account to pay out the outgoing amounts safely and I'd move the rest out into the higher paying savings account. 

But if you want to keep close to £5000 in the vantage account, then would opening a second vantage account help?

You'd need to get the additional direct debits to get the interest on it, but depending on the sequence of incoming and outgoing payments it could help you to keep close to the max £5000 in one whilst the other account goes up and down. The benefit will depend on how often you have excess funds when you just have the one account and whether you have spare direct debits that you can use.

fenwick458

I would just ensure it always has the £5000 in it as a minimum, and then for accounts that have no direct debits (eg TSB classic plus) I set up the monthly standing orders to take gather all the interest into one account, and then move that to another account where it pays for other DD's
for example, I have 4 x classic plus accounts, the all them make £2/month each roughly, so on the 1st of each month the So's look like this
1-2 £502
2-3 £504
3-4 £506
4-1 £508
and then moving onto club lloyds: so for the £1500 min credit I send £1500 to TSB 1 and send £1508 back on 15th each month
plus the lloyds one makes £5, so the total interest "gathered" in the lloyds one is £13, which pays for my TV licence and £1 MB DD's

blakemansarah

ASAP!

gsmh

TBH the interest rate on savings is so low I can't even be bothered keeping a couple of grand in an interest paying account at all. I just leave it in my non interest-paying current account to act as a buffer. As eskbanker says you can micro-manage it but hey, life's too short!

fifeken

fenwick458 said:

for example, I have 4 x classic plus accounts, the all them make £2/month each roughly,

You should  be getting nearly £4 per month from each Classic Plus account.

soulsaver

fifeken said:

fenwick458 said:

for example, I have 4 x classic plus accounts, the all them make £2/month each roughly,

You should  be getting nearly £4 per month from each Classic Plus account.

Unless you've not got the necessary £6k for 4 accounts...?

fifeken

soulsaver said:

Unless you've not got the necessary £6k for 4 accounts...?

They must surely be full otherwise he/she wouldn't have £1,500 in Club Lloyds at an inferior rate?

Consumerist

Retiredin2009 said:

. . . When do you transfer the excess over £5000 out of the account, . . .

When Lloyds/HBoS reduced all their in-credit interest accounts to 1.00% pa in the first £4k, I transferred all surplus amounts to savings and left only enough credit to service the payments due.