Transfering money and interest lost.

trashcan_2

Hi,

When you transfer money from One account (lets say ING) into (lets say Barclay's) and it takes 3 to 4 days. Do you loss 3 to 4 days interest , or not.

Thanks.

whu

you do lose interest unless they are on the FPS now

YorkshireBoy

whu wrote: »

you do lose interest unless they are on the FPS now

Some accounts don't pay interest until the day after the day of receipt though, so you'd still lose interest with "FPS".

trashcan_2

I was trying to work out how much i would lose in interest to fund a regular saver, about 6 days (3 days in 3 days out) x 12 =72 days + would we be right talking about £80 lost interest funding a regular saver.

YorkshireBoy

trashcan wrote: »

I was trying to work out how much i would lose in interest to fund a regular saver, about 6 days (3 days in 3 days out) x 12 =72 days + would we be right talking about £80 lost interest funding a regular saver.

Think about it!

You're moving £6,000 (assuming your question relates to the new Halifax regular saver).

It takes you 6 days to move the £6,000

Or, more accurately, it takes you 6 days to move £500, and then another 6 days to move the next £500...and so on.

It matters not how you move the money, only how much is moved (in total).

Assuming the source account pays 6.5% AER, then you'll lose...

£6,000 x 6.5% / 365 x 6 = £6.41 gross (£5.13 after tax)

But don't forget you're making 10% AER on the destination account, meaning the aggregate interest rate is over 8% gross on £6,000.

Mikeyorks

Assuming we're talking the Halifax 10% and you're moving the max of £500? And assuming it's from a 6% account.

There shouldn't be an 'in' and 'out'? If you're moving it to an interim Halifax account - then the transfer from that account to the Reg saver is instantaneous as it's just an internal transfer?
But even with your worst case scenario. The daily interest loss on £500 at 6% is just £0.082 per day. Therefore for your 72 days if you're doing dog leg transfers = £5.92 (gross).

EDIT ..... not that Yorkshire bloke there first again!

trashcan_2

Yes its Halifax regular saver.

I will be moving it from Kaupthing Ege and ING to Barclay's and than to the Halifax.

I appreciate you clarifying that for me, I just coundn't get to it myself.

Milarky

trashcan wrote: »

Yes its Halifax regular saver.

I will be moving it from Kaupthing Ege and ING to Barclay's and than to the Halifax.

I appreciate you clarifying that for me, I just coundn't get to it myself.

Why don't you get a savings account that allow direct transfers to any other account (eg Tesco Internet Saver) instead of (needlessly) moving the money twice via a current a account?

('Standing Order' can be replaced with 12 manual payments - Halifax (etc) can't tell them apart)

trashcan_2

I didn't know that, Thanks for the tip.