Managing current account to avoid charges and interest

Petriix

One trick is to move as many things as possible to be paid by credit card. That has two benefits:

1. you can earn cashback on everything
2. you only have to pay once per month

Keep a spreadsheet of when all your direct debits are going out and set standing orders to move the money from your savings in advance of the date. You should receive advanced notice of any payments going out, even ad-hoc DDs. If you can, try to move the direct debit dates to all be on the same day to make it easier.

Chase is a good place for instant access savings because you can easily set standing orders to go out directly from the savings. Otherwise, as mentioned above, Kroo pay reasonably good (but not great) interest on their current account so that's a good low maintenance option.

With all the bank switching I do, I'd be lost without my spreadsheet. It's a fun activity for the first of the month to set all the payments to arrive in the right accounts at the right time.

peter021072

Rob5342 said:

On page 10 it says that you won't get charged if you make payment by the cut off time, but I can't see what that is. If a payment would take you into an unarranged overdraft then they might decide not to make the payment. Switching to Monzo or Starling would be very useful as you could see the pending direct debits the day before they were taken, or even earlier.

https://www.santander.co.uk/assets/s3fs-public/documents/managing_your_money_bank0490jan20h.pdf.

I think these are the times. 

https://www.santander.co.uk/corporate/solutions/day-to-day/domestic-payments-and-receipts/payment-cut-times-and-settlement-dates

For online Faster payments it would be 23:55 but for BACS Credit transfers (which I think is how most bills are processed) 19:00.   Doubt if any of the other ones are likely to be an issue.

gt94sss2

Rob5342 said:

peter021072 said:

AmityNeon said:

Scheduled payments are processed overnight after the previous day's account balances have been closed off, hence why they are posted with the following day's date if you happen to notice them appear in the late evening just before midnight.

Transactions that occur before midnight but after the daily cut-off point (each bank has their own time and you haven't mentioned your bank) are treated as having taken place the following day. You can even make your own withdrawal after the cut-off point and transfer funds to a different bank with a later cut-off and earn interest twice for the same day (but don't do this intentionally, especially not regularly).

My bank is Santander

If I've understood correctly, providing I ensure the balance of the current account is in credit by the time I go to bed at 23:00 (every day), I shouldn't get charged for going into temporary debt between that time and 23:00 the following day

On page 10 it says that you won't get charged if you make payment by the cut off time, but I can't see what that is.

It's 8:15 pm 

AmityNeon

peter021072 said:

AmityNeon said:

Scheduled payments are processed overnight after the previous day's account balances have been closed off, hence why they are posted with the following day's date if you happen to notice them appear in the late evening just before midnight.

Transactions that occur before midnight but after the daily cut-off point (each bank has their own time and you haven't mentioned your bank) are treated as having taken place the following day. You can even make your own withdrawal after the cut-off point and transfer funds to a different bank with a later cut-off and earn interest twice for the same day (but don't do this intentionally, especially not regularly).

My bank is Santander

If I've understood correctly, providing I ensure the balance of the current account is showing a credit by the cut off time (every day), I shouldn't get charged for going into temporary debt.

Yes. To put it simply, no automated bank transfer is going to put your account into overdraft later in the evening (only you can do that with a manual payment/withdrawal). It's not something you need to worry about so just clear the overdraft in the morning. Many here do just that.

friolento

peter021072 said:

AmityNeon said:

Scheduled payments are processed overnight after the previous day's account balances have been closed off, hence why they are posted with the following day's date if you happen to notice them appear in the late evening just before midnight.

Transactions that occur before midnight but after the daily cut-off point (each bank has their own time and you haven't mentioned your bank) are treated as having taken place the following day. You can even make your own withdrawal after the cut-off point and transfer funds to a different bank with a later cut-off and earn interest twice for the same day (but don't do this intentionally, especially not regularly).

My bank is Santander

If I've understood correctly, providing I ensure the balance of the current account is showing a credit by the cut off time (every day), I shouldn't get charged for going into temporary debt.

If you have requested alerts - available in online banking only, not in the app - Santander will text you around 08:30 in the morning if you went overdrawn overnight. You then have until 20:15 on the same day to deposit enough to get back into the black. This is an example of such a text:

I let my account go overdrawn regularly, and have a fairly large arranged overdraft to ensure that none of the overnight payments bounce. I have never paid a penny in overdraft charges (a horrible 39.94% APR) as I always settle the overdraft well before 20:15.

friolento

AmityNeon said:

peter021072 said:

AmityNeon said:

Scheduled payments are processed overnight after the previous day's account balances have been closed off, hence why they are posted with the following day's date if you happen to notice them appear in the late evening just before midnight.

Transactions that occur before midnight but after the daily cut-off point (each bank has their own time and you haven't mentioned your bank) are treated as having taken place the following day. You can even make your own withdrawal after the cut-off point and transfer funds to a different bank with a later cut-off and earn interest twice for the same day (but don't do this intentionally, especially not regularly).

My bank is Santander

If I've understood correctly, providing I ensure the balance of the current account is showing a credit by the cut off time (every day), I shouldn't get charged for going into temporary debt.

Yes. To put it simply, no automated bank transfer is going to put your account into overdraft later in the evening (only you can do that with a manual payment/withdrawal). It's not something you need to worry about so just clear the overdraft in the morning. Many here do just that.

I have tons and tons of automated payments (SOs and DDs) that regularly put me into an overnight overdraft.

I suppose if I did not have an arranged overdraft, these payments might bounce, unless the bank would grant an unarranged overdraft. They would try to make bounced automated payments again sometime early afternoon on the next working day. This has been practice for all UK banks for the last 8 - 10 years or so.

surreysaver

I just have a current account with a large overdraft to cover all standing orders which might go out in one day. Then just bring the balance of that account back to zero on the day with money from savings 

AmityNeon

friolento said:

AmityNeon said:

peter021072 said:

AmityNeon said:

Scheduled payments are processed overnight after the previous day's account balances have been closed off, hence why they are posted with the following day's date if you happen to notice them appear in the late evening just before midnight.

Transactions that occur before midnight but after the daily cut-off point (each bank has their own time and you haven't mentioned your bank) are treated as having taken place the following day. You can even make your own withdrawal after the cut-off point and transfer funds to a different bank with a later cut-off and earn interest twice for the same day (but don't do this intentionally, especially not regularly).

My bank is Santander

If I've understood correctly, providing I ensure the balance of the current account is showing a credit by the cut off time (every day), I shouldn't get charged for going into temporary debt.

Yes. To put it simply, no automated bank transfer is going to put your account into overdraft later in the evening (only you can do that with a manual payment/withdrawal). It's not something you need to worry about so just clear the overdraft in the morning. Many here do just that.

I have tons and tons of automated payments (SOs and DDs) that regularly put me into an overnight overdraft.

Yes, overnight after the cut-off so no overdraft fees are charged. The concern was whether an automated bill payment would be taken later in the evening before the cut-off and thus leave very little time to clear the overdraft to avoid being charged fees.

friolento

AmityNeon said:

friolento said:

AmityNeon said:

peter021072 said:

AmityNeon said:

Scheduled payments are processed overnight after the previous day's account balances have been closed off, hence why they are posted with the following day's date if you happen to notice them appear in the late evening just before midnight.

Transactions that occur before midnight but after the daily cut-off point (each bank has their own time and you haven't mentioned your bank) are treated as having taken place the following day. You can even make your own withdrawal after the cut-off point and transfer funds to a different bank with a later cut-off and earn interest twice for the same day (but don't do this intentionally, especially not regularly).

My bank is Santander

If I've understood correctly, providing I ensure the balance of the current account is showing a credit by the cut off time (every day), I shouldn't get charged for going into temporary debt.

Yes. To put it simply, no automated bank transfer is going to put your account into overdraft later in the evening (only you can do that with a manual payment/withdrawal). It's not something you need to worry about so just clear the overdraft in the morning. Many here do just that.

I have tons and tons of automated payments (SOs and DDs) that regularly put me into an overnight overdraft.

Yes, overnight after the cut-off so no overdraft fees are charged. The concern was whether an automated bill payment would be taken later in the evening before the cut-off and thus leave very little time to clear the overdraft to avoid being charged fees.

The rules for overdraft charges are the same for automated and for manual payments.

peter021072

Perhaps I should apply for an overdraft even if I don't use the credit for longer than a fraction of a day to avoid the chance of a bounced payment.