Current Account Savings Loophole

[*Badger*]

I'd imagine a lot of the financially savvy folk on here are already onto this.

http://www.moneysavingexpert.com/savings/savings-l...

Basically using a current account as a savings account to earn higher interest on a fixed balance.

So, I've setup 3 x Bank of Scotland Vantage Accounts (as they are the easiest, no need for DD's etc, just need to pay in a £1000 a month).

But that's my question, it seems there are two possible answers.

Opt 1 - Transfer £1000 in from external to Acc 1 to start off (now). Transfer £1000 from Acc 1 to Acc 2 on 1st day, Transfer £1000 from Acc 2 to Acc 3 on 11th day, Transfer £1000 from Acc 3 back to Acc 1 on 21st day - And repeat, month after month. The same £1000 goes 1-2-3-1-2-3 month after month.

Will that satisfy the only T&C which is "pay in a £1000 a month"? Or do I need to do -

Opt 2 - Transfer £1000 in from external to Acc 1 to start off (on 1st day). On 5th day, transfer back to external. Transfer £1000 in from external to Acc 2 on 11th Day. On 16th Day Transfer back to external. Transfer £1000 in from external to Acc 3 on 21st Day. On 26th day, transfer back to external. Repeat. The same £1000 goes 1-out-2-out-3-out-1-out-2-out-3 month after month.


So Opt 1 or Opt 2 to meet the criteria ?

I've gone Opt 1 (as its easier).

Its not a massive amount, but can earn up to £118 per year per account.

[PurpleMoonlight]

All that agro for £118?

Life is to short .....

[AyBee]

PurpleMoonlight said:

All that agro for £118?

Life is to short .....

To be fair, it's not exactly much work, you set up the transfers to happen automatically online which would take 30 minutes tops and then it's done It just depends how much work it is to set up all the accounts...

[harveys]

I just got £1000 to flow through all 3 accounts by standing order on the same day. So by the end of the day there is no more than 5k in each one.

15k saved with net interest of approx 2.4% which is better than most cash ISAs...and it can be accessed any time.

Money transfer can be internal.

[Berz]

Option 1 works just fine.

There are higher interest accounts than the Vantage ones but it would mean going into different banks and opening the accounts, but they also took less than £5000. I had Nationwide and TSB ones, now just TSB as the Nationwide one only last a year.

[KTF]

You can transfer the 1k between accounts instantly on the same day. No need to wait 10 day or whatever.

As you earn interest up to 3K on each account in the BoS Vantage then just load each one with 3K and setup a standing order between each one to move £1K on the same day For example.

Aug 28 - SO Vantage 1 > 2
Aug 28 - SO Vantage 2 > 3
Aug 28 - SO Vantage 3 > 1

The transfer in/out will happen instantly and that qualifies as 'paying in'.

Then all you have to do is logn on once a month and skim off the interest.

The same approach worked for me with the 5x Lloyds Vantage accounts I had (until they changed the t&c to one only) and still working fine with the 2x TSB ones I have.

They all use the same online banking backend due to them all being related at one point.

[*Badger*]

It's up to £118 per account per year (based on 5k) so £354 a year for something that, all in, including account setup has taken me about an hour.

Thanks everyone, I have it on a ten day cycle so that each account has the same amount in for the same amount of time to try and make the interest even across all 3 accounts. You don't get interest on the balance over £5k but you do get it up to £5k so that's all good. (as at different times in the monthly cycle each account will have over £5k in for a few days). I wasn't planning on removing the interest month by month as it'd be less than £30 a month, I'll just leave that in.

[msport123]

BoS as well as Halifax also do a 'younger saver' account which pays 3% on balances up to 20k. No need for monthly deposits, standing orders etc. Just declare the interest for tax purposes and your not breaking any rules :-)

[gazapc]

I've got 4 of these accounts with various banks cycling cash on a monthly basis. Also opening current accounts for the switching perks (just received my £100 from the co-op today) which is a nice bit of beer money for very little work.