The proposed £500 temporary overdraft

veryintrigued

Fortunately not one for me but I wonder if some people will be tempted to use this buffer and invest/save the money somewhere else temporarily.

Ala stoozing.

Those with multiple current accounts could have a considerable amount.

As I say not one for me as much on ethical grounds.

Indeed won't this impact credit scores?

nick74

Do ethics come into it? It's not as if you using a £500 free overdraft on your account would somehow deprive someone more in need from using a free overdraft on their account? No more unethical than taking a 0% balance transfer offer perhaps?

veryintrigued

nick74 said:

Do ethics come into it? It's not as if you using a £500 free overdraft on your account would somehow deprive someone more in need from using a free overdraft on their account? No more unethical than taking a 0% balance transfer offer perhaps?

For me, the fact I don't, thankfully, need the overdraft at this terrible time would mean taking advantage of the banks and crossing my own line in the sand if I were only using it, at this time, to stooze.

Any credit impact would also concern me.

nick74

I would question whether certain banks had any such ethical concerns when they 'took advantage' of us taxpayers to bail them out a decade or so ago, but that is another discussion! No more unethical than stoozing from a 0% credit card, but that's just my opinion.

However, it would quite likely be reported to the CRAs as being permanently in an overdraft for 3 months so perhaps not something you'd want on your credit file for the sake of what little return you might earn from investing £500 a time.

stehouk

Save it where ? 
Not being funny but easy access at just over 1% isn't worth the effort, unless you know differently.

veryintrigued

stehouk said:

Save it where ? 
Not being funny but easy access at just over 1% isn't worth the effort, unless you know differently.

Those on here with multiple (and I mean 10+) CAs might have seen this an opportunity as they'll almost certainly hold legacy instant accounts that are around 1.5%.

I did say invest too. You maybe missed that. Some would maybe see a, very risky, short term punt an option. 

Again not for me

colsten

You would have thought that those who are still lucky enough to have worthwhile current 'savings' accounts will have them filled up to the max already (which obviously would exclude these account from being candidates for taking out an O/D, anyway).

But even if people had spare capacity in their 'good' current accounts, or had other accounts paying 1.5% AER, the max yield from £500 would be £7.50 per account provided the interest-free O/D were available for 12 months, which I don't believe is under consideration. I have heard of some vague ideas of an interest-free 3 months period, which would bring it down to something like £1.87. I know times are desperate, but probably not quite as desperate yet for going after this (should it ever materialise).

I don't see any ethics issue if anyone would pursue it but I would hope everybody will still have something better to do with their time.

born_again

Some banks have released new savings rates of 0.01% to match the BofE rate.

Really going to get rich at that rate.

williamstewart

I got an email from Lloyds earlier saying that the first £500 of my overdraft was now interest free.
"To help support you, the first £500 of your arranged overdraft is now interest free from 9th April to 9th July".
Should save me £30+ a month which will be put towards reducing the overdraft. 

Se1Lad

It's an interesting point. Barclays have initially offered that your entire overdraft will be interest free for just over one month (until April 30).  If I had moved my £15,000 overdraft limit to my 1.3% APR instant access savings I could have made round £16 interest in one month.  If they extend the interest free period longer then I may consider it.

JuicyJesus

Considered it but given it's three months, and at a maximum you'd be getting £500 at about 1.5% (generously), total profit would be under £2.

Not worth the hassle tbh.