A&L Premier Direct Overdraft Limit?

Gopes

Hi folks - I am toying with the idea of opening an A&L Premier Direct account - the one with 8.5% on credit balances and a 0% overdraft, and an Abbey account with 8% on credit balances.

I am currently with Natwest (whom unlike most other people, i do not have a problem with). But of course, they don't really give any interest, and have a large overdraft interest rate.

Now I have a £5k OD limit - which I haven't used in quite a while - in fact my account is always in the black (I am fortunate enough to earn considerably more than my monthly outgoings).

Anyway, it occurred to me that if I can convince A&L to match my existing OD Limit - I could essentially use it in the same way as Stoozing on a Credit Card - i.e. get £5k of interest free money to stick in a savings account.

I was also thinking that if this were the case, once the A&L account is set up, I might also try to open a Abbey account (8.0%) on credit balances and basically use it as a high interest savings account (maximum £2.5k I believe).

I think that both A&L and Abbey would require my salary to be paid in - do they actually need the salary paid in - or do they just want to see a "salary-like" amount going in every month.

Ideally, I will keep my natwest account running for day-to-day stuff - I don't want to mess around switching all my direct debits - and like their online banking system.

So to summarise:
1 - I would like to open an A&L account and take advantage of their 0% OD - will I need to actually pay money into the account on a regular basis?
2 - I would like to open an Abbey account soon after, to essentially get a £2.5k savings account at 8% - I realise that this is a bit more tricky as I need regular salary payments going in.

Any flaws in my plan?
Gopes

Edit: Just noticed that A&L have a maximum OD limit of £2,500. Are they likely to give that to me?

YorkshireBoy

Gopes wrote: »

Any flaws in my plan?

You don't appear to have read and understood the A&L T&C's. For example...

1. You don't have to deposit salary for the 'standard' account with (up to) £2,500 overdraft (subject to status).

2. You must use their switching service (something you say you don't want to do) if you want them to consider matching your existing overdraft (subject to status).

3. You're asking whether you need to "pay money into the account on a regular basis", when the account demands a minimum £500 per month credit in order to avoid the £5 per month underfunding fee.


Someone else will comment on your Abbey "plan".

Gopes

I thanks for responding so quickly. I hadn't noticed the need to use the 'switching service' to get them to match my overdraft - only real reason I didn't really consider doing this is that i don't want to run the risk of getting my direct debits messed up - how reliable have people found the switching service - what I don't want to do is run the risk of meeting e.g. minimum monthly payments on my stoozing accounts - because they have missed up the direct debit schedule - that is why I had thought it would be easier to leave them all with Natwest. Any experiences of how this works in reality?

Regarding point 3 - I realise that the account demands a £500 minimum credit - what I meant was - does this need to be a salary - or can it simply be a transfer from another account - and then of course transfer back out a few days later to use the full overdraft as much as possible.

Cheers
Gopes

YorkshireBoy

Gopes wrote: »

...only real reason I didn't really consider doing this is that i don't want to run the risk of getting my direct debits messed up - how reliable have people found the switching service - what I don't want to do is run the risk of meeting e.g. minimum monthly payments on my stoozing accounts - because they have missed up the direct debit schedule - that is why I had thought it would be easier to leave them all with Natwest. Any experiences of how this works in reality?

You usually only hear about the ones that have gone wrong...and there have been many reported with A&L.

As a stoozer, I have to say I'd never use a switching service because the penalty for getting it wrong could run to 4 figures for me (in late fees, interest charged, and lost income). In fact, even if I didn't have 8 or 9 stoozing card DD's set up I still wouldn't use one...I'd arrange the switching myself.

what I meant was - does this need to be a salary - or can it simply be a transfer from another account

Doesn't have to be salary. From the A&L website...

You need to pay in at least £500 a month or we may charge fees. Credit transfers to the account from other Alliance & Leicester accounts will not count towards the minimum monthly credit.

http://www.alliance-leicester.co.uk/currentaccounts/index.asp?page=prem-legals&currpage=home

matthewking26

Hi, just a quick one and sorry if this is already covered. I opened an A+L account. They would only give me a £300 overdraft as they wanted proof I had been in credit for at least 3 days in the previous 3 months to match my current od of £1500. As I was permanently in my overdraft I obviously couldn't prove it, they didn't mention this until after I'd taken out the account though.
They did move my direct debits and standing orders over with no problems, (HSBC caused a problem by taking a standing order payment after it had been cancelled, but they did return it the same day when I told them)
On another note, does anyone know if the 8.5% interest they are touting is for new customers only or will everyone get it? Can't find anywhere on my account page telling me my current interest rate. Would be annoying as I've only had the account 2 months earning 6.5%, would be nice if they added another 2% on that!

msmicawber

Hi,

I opened an A&L Premier Direct account and used it for stoozing in a minor way (I keep the O/D up to its limit and transfer money to the savings account to earn interest, then that'll stop once the 0% period elapses). I chose not to use their switching service, but this didn't affect their matching my overdraft limit with my previous bank.

I do pay my salary in, but could see nothing in the T&Cs indicating that the source of the minimum monthly payment into the account had to be a salary.

The only problem I can see for the OP is that the maximum OD limit offered on the account is £2.5K.

masonic

Gopes wrote: »

I hadn't noticed the need to use the 'switching service' to get them to match my overdraft - only real reason I didn't really consider doing this is that i don't want to run the risk of getting my direct debits messed up - how reliable have people found the switching service - what I don't want to do is run the risk of meeting e.g. minimum monthly payments on my stoozing accounts - because they have missed up the direct debit schedule - that is why I had thought it would be easier to leave them all with Natwest. Any experiences of how this works in reality?

You're right to be cautious. But in order to qualify as having used the switching service, all you have to do is switch one payment. If you pick out just one or two payments that aren't too important there is very little to worry about.

Judioo

Don't bother to change, their switching has been hopeless for my daughter and they have messed everything up. Stick with Nat West - at least they have some branches. A&L have hardly any.

Gopes

masonic wrote: »

You're right to be cautious. But in order to qualify as having used the switching service, all you have to do is switch one payment. If you pick out just one or two payments that aren't too important there is very little to worry about.

Ah - so does that mean the "switching" service allows me to chose which direct debits/standing orders to switch?

That is better - I can switch my phone bill (not the end of the world if there is a problem), and leave the stoozing card DDs safely with Natwest.

Cheers for the tips.
Gopes

PBA

A&L only require £500 a month going in to avoid the £5 fee, but if you want the 12% monthly saver then you do have to have your salary going in.

Abbey need £1000 a month to get 8.1%, otherwise the rate drops to 0.1%. If you switch to Abbey you get 8.1% on balances up to £2500, if you don't switch it's 8.1% up to £1000.

masonic

PBA wrote: »

A&L only require £500 a month going in to avoid the £5 fee, but if you want the 12% monthly saver then you do have to have your salary going in.

The Premier Direct account doesn't come with the 12% regular saver - that's the Premier account.