Is it wise to open 2 current accounts - Alliance and Leicester

buffybooth

I have always had an HSBC current account which enables me to save up to 250.00 per month at a high 8.5% interest rate with their linked regular saver account. The interest on their current account is rubbish but to save the hassle of changing banks I was thinking of opening a second current account i.e. Alliance and Leicester and feed it with 500.00 per month direct debit from my HSBC account. That way I have the convnience of staying with my high street branch and the high interest saver, yet can enjoy a higher rate on surplus monies with the other current account i.e. Alliance and Leicester. Does this make sense, any flaws? Thanks

ShelfStacker_3

You could always do an upgrade to Bank Account Plus for £12.95 a month and get 8% interest on your current account, with the additional bonus that HSBC's customer service isn't crap.

How much do you keep in your current account on average, anyway? If you have 500 quid, and it gradually gets reduced to nought over the next month, the interest you'd earn with Alliance and Leicester could be around 50p - I know 50p is 50p, but for all that could go wrong is it really worth it?

jamesd

buffybooth, you could use the A&L account as your main bill payment account and keep a comfortable bill payment safety margin in that account. Easy to transfer bills with their transfer service and you can select which bills to switch, with no requirement to close your existing account. Each month top up the A&L account from salary with enough to pay the bills and transfer the rest into a top savings account.

ShelfStacker, "8% AER (7.72% gross) fixed credit interest for balances up to £1,000 for 12 months from account opening. 2.5% AER (2.47% gross) variable up to £2,500 and 0.1% thereafter". You'd need to be getting 8% on something like 7000 balance to recover the cost of the monthly fee.

ShelfStacker_3

That is true, yes, however, in my next breath I said quite clearly that it's not really worth chasing a higher rate of interest on a current account as money very rarely stays in there for very long. It seriously isn't worth the hassle of switching, or dealing with Alliance and Leicester. And no, 12.95 is not very good value at all.

emma396

Open an account with halifax if you can fund it with the 1000 minimum to get 6.17% interest. I have many current accounts, i shift money about to get the benefits. Have HSBC regular saver like yourself, linked with hsbc current account. Also have llouds 8% reg saver linked with current account. abbey 10% reg saver and 8% current account and A&l 12% reg saver and current account. is it a lot of hassle, depends how much money you have and whether you think it's worth it.

jamesd

ShelfStacker, I'm happy to have the A&L account as my bill payment account and get interest on my bill payment variation safety margin money, plus the money for bills until they are paid. With say a thousand Pounds of safety margin money it's only 50 or so a year in interest but that beats nothing. I didn't find switching regular payments a hassle. They send you a form with a list of all of the standing orders and direct debits and you just tick which ones you want to move. Easy enough.