overnight accounts - do they exist?

jamesb

i've recently sold my flat and currently have a wod of cash sitting in my bank account - getting a measly 3.85% interest.

my dad mentioned something called 'overnight accounts' which run for 3 or 5 days, with options to extend - the interest rate being set quite high. banks don't advertise these as it's not really in their interest. i went to barclays - they know nothing; about this at least!

does anyone know anything more? please help! i wan't to make the most of my money!

many thanks,
james.

kiwichick

I dont know anything about these either - sorry. My mother in law is in the same situation, she has put the capital from her house sale in account with ING, they have the best savings rates around and I'm pretty sure they are notice free withdrawl. Why not give them a try?

jamesb

many thanks for your quick response. i'll look at ING. i've got savings account with cahoot, but the interest is annual - as it's a short term thing until we buy our next property, i'd rather go for monthly (greed!?).

thanks again - next stop, ING.

james.

dunstonh

They exist. Tend to be for larger amounts and a variety of terms, from 1 day upwards. They are not advertised and not meant for mainstream funds. I seem to recall that the minimum was something like £50k, but that was many years ago. It is probably higher now.

I wouldnt expect the average bank clerk to know much about them.

cheerfulcat

jamesb wrote:

i've recently sold my flat and currently have a wod of cash sitting in my bank account - getting a measly 3.85% interest.

my dad mentioned something called 'overnight accounts' which run for 3 or 5 days, with options to extend - the interest rate being set quite high. banks don't advertise these as it's not really in their interest. i went to barclays - they know nothing; about this at least!

does anyone know anything more? please help! i wan't to make the most of my money!

many thanks,
james.

Hi, James,

Yes, there are overnight accounts. They are called money market accounts and most banks and some building societies offer or have access to them. They are fixed-term accounts but the term can be as short as 24 hours, and they can be rolled over indefinitely. One nice thing about them is that if you have more than, IIRC, £50,000 in the account the interest is paid gross...you still have to pay tax on it, of course, but it rolls up gross which means you increase your money faster :-)

The clerks in my bank certainly know about them ( they are commonly used in precisely your situation ) but if you can't get any sense from the counter staff, ask to speak to the manager.

HTH

Cheerfulcat

jamesb

great! i called barclays and have booked an appointment with a financial advisor for next week. funds are approx £46k, not quite the 50k you mention, but i'm sure they can do something...!? we'll see.

thanks for all your advice.

best,
james.

dunstonh

Not sure that a financial advisor from Barclays, who is tied to L&G, will be of any use to you. L&G offer no short term products and the money market accounts are a banking product rather than a designated investment regulated financial services product. Its quite probable (although not impossible) that the Barclays tied advisor would not know anything about them. I recommend you speak to the advisor on the phone first before wasting both his and your time. I would have said you were probably better off getting an appointment with someone that deals with the accounts. Or better still, look at sticking it in one of the savings accounts from the providers mentioned on this site frequently.

cheerfulcat

great! i called barclays and have booked an appointment with a financial advisor for next week.

Aaaargh, nooo! The financial advisor will attempt to sell you expensive investment products; he may know about money market accounts ( unlikely, though ) but he won't be interested in giving you advice on something that doesn't pay commission. Just see the manager or accounts manager.

Here's an example of a money market account

http://www.hsbc.co.uk/1/2/personal/savings-investments/more/money-market

HTH

Cheerfulcat

BenL

My old employer Cater Allen Private bank does the accounts.

Called Term deposits, range from 1 week to a year. They automatically roll over as well if you don't need the money.

https://www.caterallen.co.uk

Ben

steady__eddie

These a/c.s seem pretty handy tools to me. I will be having a few bob coming in shortly and it's a bit better rate than my present current a/c.
The rate would appear to change marginally on a daily basis which could mean the difference between a case of Carling or Stella Artois over a week but given that I only deal in notes of the realm due to cheque clearing times and live out in the sticks, I would be confined to the big 4. I presume that a current a/c. would have to be run in conjunction with it. If the bank were given sufficient notice, it should be possible to withdraw funds in cash I presume ?
Can anyone see any flaws so far ?

cheerfulcat

steady__eddie wrote:

Can anyone see any flaws so far ?

Not a flaw as such, just a pointer; if the interest is paid gross, you must make a note of the amount and declare it. It's easy to forget, if you are used to having tax deducted by the bank/building society.