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penaltys for regularly switching savings

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Are there any penaltys to pay if you keep moving money around so its always getting the best rate in a savings acc.
My account with citi loses its opening bonus this month so i will be opening a new one with better rate.
Do i then leave the account open for future, or just close it and keep chasing the best rate with whoever offers the best.
Do banks not like you doing this or is it ok?
Any info appreiciated as i'm new to saving.

Comments

  • LittleVoice
    LittleVoice Posts: 8,974 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    Provided there isn't a penalty applicable to the account being closed (eg 60 days loss of interest or no interest in the month of a withdrawal), the only penalty is in the loss of interest in the time it takes to move from one account to another.

    They may not like it - because they want to hold onto your money at as low a cost to them as possible - but there is no financial penalty they will impose. (Though I seem to recall that Coventry Building Society later may not allow you to open another similar account if you have closed one.)
  • ryan07
    ryan07 Posts: 13 Forumite
    i dont think that there are any penalties for it... but yeah your account has to maintain a mimimum balance...
    No Links in Signatures by Site Rules - MSE Forum Team 2
  • pem2
    pem2 Posts: 134 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    Of course there are penalties. Every time you move, unless it is within your own bank, you will lose at least 3 days interest (although there is a plan but stalled as usual until at least May, to make this instantaneous).
  • masonic
    masonic Posts: 27,271 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    As pem2 says, you lose potential interest for every transfer you make. It takes time to recover that, so if you switch often, and for small increases in rate, you can actually lose money. For a rate difference of 0.2%, it would typically take between 2-3 months to break even after the transfer. Until that time, you are actually worse off than you would be had you not transferred.
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