Fabulous Investment with negative fees. Get Paid to invest. No Catch.

fred246

Has this been covered before? Sorry if it has.
What you need
1)A Halifax Reward Current Account - Choose £5 reward by spending £500 on debit card.
2)Open a Halifax Stocks and Shares ISA
3)Invest £500 a month using your debit card in HSBC FTSE ALL WORLD INDEX with OCF 0.13%
The investment charge is £2 per month but Halifax give you £5 back for putting £500 on the debit card. So you MAKE £3 a month.
In a year you make £36 but Halifax charge £12.50 annual fee so you only make £23.50.
There is the fee on the investment. With an OCF of 0.13% the fees on £18K is £23.40
So you can get PAID to invest for 3 years.
Is it a good investment? Well it's made 88% in the last 5 years.
And that's NOT because a fund manager has got lucky.

george4064

No reason requirements that just spending £500;

If you do all of the three things below each calendar month you’ll earn your chosen reward monthly.

• Hold a Reward Current Account and paying £1,500 or more into your account each month. (a £3 monthly maintaining the account fee will apply for each month you pay in less, and you’ll not receive the rewards that month)
• Stay in credit
• Spend £500 or more each month on your debit card OR keep a £5,000 or more daily balance

This isn’t a loophole per se, you should only invest if it’s suitable for your risk tolerance and your circumstances and not just because of this ‘loophole’ you have highlighted.

badger09

There are easier ways to earn £5pm on this account which have been extensively discussed elsewhere. 

AlanP_2

Perhaps Fred needs an IFA to help him out with optimising his investment strategy 

fred246

Well is there a cheaper way of investing in a global tracker fund? Most people would look to Vanguard but their OCF is .23% and then 0.15% platform fee. Total 0.38%. An IFA would charge about 2% for a hotch potch of funds. This is less than £0. They are giving you money.

colsten

Dear oh dear. What a complex and entangled construct.

fred246

There will always be some people who aren't happy with zero fees. Like those who receive the fees! What exactly aren't you happy with? Obviously you can choose other funds but they will be low cost rather than no cost.

Prism

It might be worth considering when you are starting off and only contributing a small amount over the first three years. It seems neither here nor there when talking about a much bigger allocation like 20k per year and 500k of investments.

Personally I am fine with fees up to around 1% so I guess I wouldn't be the target audience for this idea.

fred246

Well it's good for any regular investing over £500 per month. No platform fee. Get £3 back for every monthly payment.

colsten

The monthly Halifax fiver(s) can be had without the need to invest £500 a month, as has already been mentioned. Everyone is free to do with their fiver(s) as they see fit - including using them to pay investment fees.

fred246 said:

So you can get PAID to invest for 3 years.

The Reward scheme runs for 12 months. Nobody knows whether Halifax will offer renewals with the same terms. So there is no guarantee that you would get the fiver(s) for 3 years.

Eco_Miser

I don't understand all the negativity on this thread. Yes, there are other ways to pay yourself £500 by debit card, but if you want to invest £500 or more each month, this method kills two birds with one stone. 

I've even used a variation to have Halifax pay the transaction fee on an investment at their sister company Iweb and another £5. That's still a tenner saved as I would have been investing anyway.