Having your Cake and Eating It

ritchiewags

I haven't seen a similar comment on the forum to this and I think this is an excellent way of getting the best from the banking system.
My current account is with First Direct. Their customer service is the best I've come across. Then they chopped the interest on the account and I was a bit miffed. Looking around, Halifax had a good deal at the time of 6% in credit interest. I didn't want to loose the service at First Direct. So I set up a transfer from First Direct to Halifax to cover the direct debits and a bit on top and then set about switching the DDs. My money goes in a few weeks before the DDs, so sits there earning interest. I maintain the £1000 a month minimum into First Direct and don't get charged by them.
It's great, current accounts with good service and good(ish) rates. Halifax have dropped now to 5%, may look around for a better deal.
I wonder what other MSE fans think of this idea.
Rich

Rafter

Rich,

Lots of people doing this.

For some, life it too short to be monitoring current account every day to transfer excess to savings.

For others, the risk of an unexpected withdrawal leading to overdraft charges or interest wipes out the benefit.

Faster payments (launched yesterday) will mean that you won't get delays or lost interest moving money between accounts with different organisations either.

I imagine the 'smart' agregation services like first direct online banking plus will soon be able to automatically tell you if you can make more interest by switching funds each day.

Hopefully this in turn will lead to all accounts having to offer a better rate, to make switching unecessary.

The Halifax deal is an 'intro' offer though and is completely unsustainable. Similarly first direct lowered their rate so they can pay for all those £100 incentives and juicy mortgage deals they are currently offering.

R.

hustle90

While many people may do this, I'm one of the people who would rather have all my money/savings in one place instead of spending time everyday transfering money etc.