Current Account Monthly Pay In

Question

I've seen from a question here, along with some reading I've been doing on MSE that I can have multiple current accounts at the same time.

What I'm trying to do now, is to work out if I can use this to my advantage when it comes to bonuses, like interest rates and cashback, by setting up several accounts with the maximum interest paying amount in them.

Most of these accounts mandate that you have a minimum sum coming in each month:

• Santander 123: Minimum £500pcm; 3% up to £20,000
• Club Lloyds: Minimum £1500pcm; 4% up to £5,000
• TSB Classic Plus: Min. £1500pcm; 4% up to £5,000

And there are more with similar rates, and then there are Regular Savings accounts where I can average ~4.5% on circa £8,000.

I'm aware of other savings options, but I'm working on the premise that I'm only gong to be playing with money I have left after I've filled Cash ISAs for both this year (what's left of it) and then next as of mid-April.

The big question here is, if I open current accounts with all these institutions, will they know if I move money between them, i.e. from the one I pay my salary to, to the next, to the next etc. and refuse to give me the rates and bonuses I want?

Answer 1

Your plan will probably work.

I speak from past experience approx 5-10 years ago, when Lloyds used to offer tiered interest of up to 4% on £5000 in their Vantage accounts. It was allowed for an individual person to have up to three Vantage accounts. The criteria for obtaining the headline interest rates were simply:

• maintain a certain minimum balance
• pay in a certain minimum amount each month

What I, and many others, did was to set up three Vantage accounts, call them A, B, and C, and a standing order on each to transfer minimum amount + £1 on the same day each month in this manner:

• A -> B
• B -> C
• C -> A

This satisfied the letter of conditions, though perhaps not the spirit. Most importantly it satisfied the bank, and all three accounts received that headline interest rate.

These days banks have got a little wiser to this and have started including the 'set up n direct debits' condition, which makes this a more time-consuming system to arrange - you must assign your various bills across your accounts - but I believe that the overall plan still works. They don't care where the money comes from, or whether it stays - just that it comes in. Enough people get it wrong that they don't have to worry about the few who get it perfectly right (see also: how 0% balance transfer offers can be profitable...)

Answer 2

if I open current accounts with all these institutions, will they know if I move money between them, i.e. from the one I pay my salary to, to the next, to the next etc.

Of course they will know. After all you will provide the account numbers for transferring the money. Regarding the intent of transfer they don't care. They only care the about the amount coming in regularly.

refuse to give me the rates and bonuses I want

For this I will go through their terms and conditions and you should do it. Check for any excluded conditions. Read between the lines. But check on what amount will you be getting the interest. Most of these accounts pay interest daily and on the amount in the account in a day. So you might not be generating much of an interest in those accounts if you don't have a substantial balance.