Moving money between savings accounts to increase returns

GHW

This is probably a dumb question but I’ll try. Please don’t flame me if it’s ignorant!

I have two easy access savings accounts that pay out interest on different days of the month.

 if I transfer all my money into one account the day before interest is due will I receive interest on that full amount? I can’t find info on either account on how interest is calculated (chase and virgin).

My thinking is that I continuously switch all my money between accounts just before interest is due, this making two lots of interest each month. 

Anyone do this or know if it’s possible?
ta!

twadds123

Most savings accounts calculate interest daily so this would not work

twadds123

Theoretically you could find out what time each day the interest on each account is calculated and do it daily, but that's a lot of work and with that many withdrawals and deposits you might find yourself subject to extra fraud and money laundering checks

flaneurs_lobster

Simple answer, no. Interest is calculated on the balance in the accounts on a daily basis. What varies is when it is shown and/or paid.

wmb194

GHW said:

This is probably a dumb question but I’ll try. Please don’t flame me if it’s ignorant!

I have two easy access savings accounts that pay out interest on different days of the month.

 if I transfer all my money into one account the day before interest is due will I receive interest on that full amount? I can’t find info on either account on how interest is calculated (chase and virgin).

My thinking is that I continuously switch all my money between accounts just before interest is due, this making two lots of interest each month. 

Anyone do this or know if it’s possible?
ta!

Interest is accrued daily so, if the pay date is the next day, you'd earn one days' interest on the amount transferred - take a look at the account T&Cs.

Band7

Interest is calculated daily, based on the balance in the account at the end of the day, and the respective interest rate. For this calculation, it is irrelevant when your interest actually gets credited to your account.

Different banks have slightly different, unpublished, 'end of the day' times, and there has been some sport by people some time ago to figure out those 'end of day' times and shunt money about in order to get interest for the same money on the same day. AFAIK, banks identified the sport quite quickly, and took a very dire view about it, i.e. closed accounts involved.

But even if it was a bona-fide sport, it would be a tremendous effort to do this every day, for not very much return.

You are likely to improve your returns by using things like the Zopa ladder and/or Regular Saver accounts. Information about both is on this board.

Band7

NB. Neither Chase nor Virgin have market - leading rates for instant/easy access accounts.

AmityNeon

I'm genuinely curious about Chase.
https://www.chase.co.uk/gb/en/product/chase-saver-account/

The second heading:


Virgin is a bit more buried in the detail, but like most savings accounts, interest calculation is usually found in the Summary Box:

Interest is calculated on a daily basis and paid on the last working day of each calendar quarter.

GHW

Thanks all. Kinda what I thought as otherwise we’d all be doing it.

im aware they’re not the best rates but I switch fairly often and there’s only so many times I can be bothered! 

adindas

In the past there were discussions about using arbitrage opportunity taking advantage of different banks end of the day cut off where the interest is credited to your account. Also you might get more time by using bank holidays weekend slots. I personally did it in the past moving money during the weekend and bank holidays between LBGs and Santander, Nationwide account, when these banks were paying a high interest rate in current accounts.

But the main problem here is that you will need to do the research to find that particular time, making sure you do not miss that slot during that day.

Another problem here is that beside risk of missing the slot, the banks have limit of the amount of money you could move in and out in a day. It might also trigger suspicious money laundry especially if the money to be moved is relatively big.

If the money to be moved is relatively small it might not be worthy considering your time and risk.

fwor

To put it into perspective, if you limit yourself to the maximum single transfer that you're likely to be allowed in one transaction (typically £25k, but may be less depending on the bank) and assuming an (optimistic) interest rate of 4% AER, you stand to make about £2.70 each time you succeed. Would you risk having your account(s) closed for £2.70 a go?