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Using a 0% overdraft as savings
lamorna23
Posts: 24 Forumite
I couldn't find anything about this so I thought I'd start a new thread. Are there any issues using a 0% overdraft facility as savings or investment? I have seen some banks offering 0% overdraft, which made me think why not open the account get the max overdraft (£2500), then use the money to get interest from a different bank or if you want buy some premium bonds?
I don't think there is an issue but it does seem very cheeky. Anyone offer some advice?
I don't think there is an issue but it does seem very cheeky. Anyone offer some advice?
MFiT member 127
Mortgage Oct 2008 £96,500
Mortgage 12/12/09 £82,842.66
Mortgage 12/12/12 zero (hopefully!)
Mortgage Oct 2008 £96,500
Mortgage 12/12/09 £82,842.66
Mortgage 12/12/12 zero (hopefully!)
0
Comments
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I do this all the time with my Lloyds TSB graduate account. I pay interest free overdraft into a Lloyds TSB 2-year 8% regular saver account.
Its cool..... the bank pays me for borrowing its own money!0 -
Loads of my friends used to do this when we were all on 0% overdrafts as students. Don't see anything wrong with doing it at all...0
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I couldn't find anything about this so I thought I'd start a new thread. Are there any issues using a 0% overdraft facility as savings or investment? I have seen some banks offering 0% overdraft, which made me think why not open the account get the max overdraft (£2500), then use the money to get interest from a different bank or if you want buy some premium bonds?
I don't think there is an issue but it does seem very cheeky. Anyone offer some advice?
There's nothing that says you can't so go for it. You'd be better off keeping it in an instant access ISA though, tax free interest and if you ever need to get the money back asap for any reason you can do.
Go for it.0 -
Well by the response so far it looks like it's not an unreasonable thing to do. I don't know what Martin would make of it but I'm going to look into it a bit more. Thanks to all the positive replies.
MFiT member 127
Mortgage Oct 2008 £96,500
Mortgage 12/12/09 £82,842.66
Mortgage 12/12/12 zero (hopefully!)0 -
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It is in effect a form of stoozing but also I specifically call what you're suggesting deficit banking and you will see it explained in the student accounts article Martin Lewis, Money Saving Expert.
Please note, answers don't constitute financial advice, it is based on generalised journalistic research. Always ensure any decision is made with regards to your own individual circumstance.Don't miss out on urgent MoneySaving, get my weekly e-mail at www.moneysavingexpert.com/tips.Debt-Free Wannabee Official Nerd Club: (Honorary) Members number 0000
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