Savings Account Shuffle!
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Cardinal-Red
Posts: 664 Forumite
Hi,
I've been on the periphery of stoozing for a while now, focussed first on getting my debt down. Now all of my 'real' debt is on the Barclaycard 1.9% LoB offer and paying off minimum payments.
So I started the bigtime stooze on behalf of myself and my partner, and have so far been accepted for:
Capital One (£17000)
IF (£12000)
Barclaycard (£8000)
Lloyds TSB (£11000)
A&L (£13000)
I've got both Egg cards, my green anniversary coming up in December.
Now we have a joint account with A&L, which I am desperate to keep looking 'normal', i.e. no huge deposits and payments, and no regular credit card payments coming out.
I also have my old, single account, with Smile, which is the account that Egg is balance transferring to. I have a Smile Instant Savings Account which pays 4.00% AER.
Aside from that we have savings accounts with Cahoot, ING, and ICICI (now working!!), and we will distribute money across these, once we've filled our Cash ISAs.
So my question really revolves around this:
In my early days of light stoozing (when I had read debt too) I could afford to absorb the monthly payments and so just have direct debits running as normal. I've worked out that monthly credit card payments now will be around £1000 a month! This money has to come out of my stooze pot, as it were.
So does it make sense to forego 0.75% - 1.4% of interest to have 6 months worth of payments in my Smile Savings account. This is because I can do instant same day transfers into my Smile Current Account to meet these payments, and leave the rest untouched, and not being subject to this mysterious 3 days of not bearing interest (often longer if you have to count in weekends, and bank holidays (a genuine fear with Christmas coming up... be careful everyone!!) when I transfer to my Direct Debit enabled account?
Having had to pay the uncapped 2% fee to Capital One, I'm very keen to maximise my 'profit'. Also, as things get more complex, the chances for mistakes get easier, especially as you can't set up DDs OUT of these savings accounts. My authorised overdraft with Smile will cover 3 months of payments (not that I want to use it!) and I check account almost every day, so I could always wait until day DD is due/paid, then transfer the money from my Savings Account into my Current Account?
Or have I tried to over-complicate an already dangerous game?
I've been on the periphery of stoozing for a while now, focussed first on getting my debt down. Now all of my 'real' debt is on the Barclaycard 1.9% LoB offer and paying off minimum payments.
So I started the bigtime stooze on behalf of myself and my partner, and have so far been accepted for:
Capital One (£17000)
IF (£12000)
Barclaycard (£8000)
Lloyds TSB (£11000)
A&L (£13000)
I've got both Egg cards, my green anniversary coming up in December.
Now we have a joint account with A&L, which I am desperate to keep looking 'normal', i.e. no huge deposits and payments, and no regular credit card payments coming out.
I also have my old, single account, with Smile, which is the account that Egg is balance transferring to. I have a Smile Instant Savings Account which pays 4.00% AER.
Aside from that we have savings accounts with Cahoot, ING, and ICICI (now working!!), and we will distribute money across these, once we've filled our Cash ISAs.
So my question really revolves around this:
In my early days of light stoozing (when I had read debt too) I could afford to absorb the monthly payments and so just have direct debits running as normal. I've worked out that monthly credit card payments now will be around £1000 a month! This money has to come out of my stooze pot, as it were.
So does it make sense to forego 0.75% - 1.4% of interest to have 6 months worth of payments in my Smile Savings account. This is because I can do instant same day transfers into my Smile Current Account to meet these payments, and leave the rest untouched, and not being subject to this mysterious 3 days of not bearing interest (often longer if you have to count in weekends, and bank holidays (a genuine fear with Christmas coming up... be careful everyone!!) when I transfer to my Direct Debit enabled account?
Having had to pay the uncapped 2% fee to Capital One, I'm very keen to maximise my 'profit'. Also, as things get more complex, the chances for mistakes get easier, especially as you can't set up DDs OUT of these savings accounts. My authorised overdraft with Smile will cover 3 months of payments (not that I want to use it!) and I check account almost every day, so I could always wait until day DD is due/paid, then transfer the money from my Savings Account into my Current Account?
Or have I tried to over-complicate an already dangerous game?
The above facts belong to everybody; the opinions belong to me; the distinction is yours to draw...
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Comments
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You could take advantage of any flexibilty to make substitute mimum payments direct from cahoot, for instance (I don't know about ICICI, but beleive it is quite similar). ING is restricted in only being able to move money back and forth between your main (and up to two additional) current accounts.
If you go with the direct debit method, then every credit card will vary in how (or whether) it treats one-off payments received before the DD collection date to reduce the amount it takes directly from your bank.
I have increasingly veered away from DDs altogether on a number of new cards now - not least because you invariably have to make the first payment manually due to set up times. If you can manage one manual payment, then why not organise the remainder of them and therefore do so directly from your (slightly higher interest) savings accounts instead? In general, you will have to experiment to get the manual payment arriving by the same date as the DD would have (having a calendar to work from is useful). For instance you'd need to set a cahoot payment for 3 'clear working days' in advance, compared to a DD, to reach the card by the same expected date.
The altenative which occurs to me - is a slight compromise - which is to transfer £1000 at a time at the start of each month into your 4% Smile instant access linked account and feed the current account from it. This minimises the number of 'bank-to-bank' movements to just one and the lost interest is minimized (say 1.4% pa on an average daily balance of £500 -58 pence- plus two days lost interest on £1000 sent to Smile from elsewhere -29pence- less than £1 per month). Why not try that?.....under construction.... COVID is a [discontinued] scam0
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