tarting current account - your thoughts

--Tony--

Hi Guys,

I have just been thinking about something, can I have your thoughts, can it be done or am I missing something here:

My idea:

Open 4 current accounts, lets assume they each have a £2k Free overdraft limit (I opened an alliance and Leicester account and the lady said the overdraft was totally free). put the £8k in a high interest account in the normal way you tart a credit card.

The only normal rule is you have to pay £1k into your account per month, so to deal with this set up a direct debit and pay in £1k of your money into account #1 then a week later (normally upto 5 days to clear) move it again automatically by direct debit into account #2 and so on forever moving this money. So you have £1k on constant move but that still leaves £7k getting interest.

I really cant see a down side and to top it all once its set up you never need do anything except gather the interest up, you don't have the credit card down sides of making monthly payments and offers expiring.

What do you think?

I know this is current account not credit cards but as its tarting I think it fits here better.

Tony

schmooser

You may want to check the small print to see what the interest is on the overdraft.

Usually the free overdraft means they are free of charges (i.e. some may charge you a fee to set up an overdraft limit or charge you a fee for every month you make use of the overdraft) this is usually in addition to interest they charge you on how much overdrawn you are.

If you find one with a 0% interest on the overdraft then we all may be interested!

johnllew

The Alliance and Leicester Premier Plus current account offers an interest-free overdraft for the first 12 months. If you can find more, your plan appears quite feasible. Some of these banks require a minimum deposit each calendar month so it's best to arrange your transfers to leave each account early in the month rather than at the end. That way, you don't risk a transfer leaving an account in one month but arriving in the other account the following month and thus falling foul of the T&Cs.

--Tony--

It is totally free with Alliance and Leicester at least, they are at the monent swapping everything over from Barclays and managed to make me overdrawn by not getting the moving of my DD's and my Pay check right. I called to complain and was told not to worry as I have a £2000 overdraft and being overdrawn would cost me nothing.

It was this that made me think of this idea.

just called them to make sure, and its true but not quite as good as I thought, as its a new account you pay ZERO interest on any overdraft until October 2005. So you really can do this for a whole year and there is no hassle with monthly payments like there is with credit cards and on top of that I dont expect opening a current account will cause such a problem with you credit rating.

Tony

--Tony--

I need to fin d three more accounts like this and set the DD's so they all fall on fixed dates within the month say 7th, 14th, 21st, 28th if they payment always pays in on these fixed dates you can fall foul of the T&C, that could be a whole year of dead easy cash.

To help me on my way does anyone know any accounts that have this type of offer, I will start trying to track them down now

schmooser

You could check the detail on this one (I guess I should actually be doing some work!):

Citibank look like they're offering a £1000 interest free overdraft limit for the first 12 months of a new account. Haven't looked in detail but it also looks like you may need to have your Wages paid into it (rather than a min. amount per month?)

--Tony--

Would be easy for a student eg nat west:

Apply for up to £2000
You can apply for an overdraft of up to £2,000 in the first year after you graduate; £1,000 in the second year; and £500 in the third year.


No charges on your agreed limit
Once you've arranged your overdraft, we won't charge you interest on what you borrow and you won't pay any overdraft fees when you stay within your agreed limit.

Still looking......

schmooser

Kudos - I should have added (in case you haven't gone there already) https://www.moneysupermarket.com is a good starting place for this kind of thing

johnllew

It is totally free with Alliance and Leicester..... and there is no hassle with monthly payments like there is with credit cards.

From the Premier Plus T&Cs:

Legal Information

Applicants must be aged 21 or over and credit the account with a minimum of £1,000 per month or fees may be applied. Credit transfers to the account from other Alliance & Leicester accounts held by You will not count towards the minimum monthly credit.