# Banking Question **URL:** \ **Category:** Factual Questions\ **Created:** [September 13, 2008, 8:27am UTC](https://boards.straightdope.com/t/banking-question/463417 "2008-09-13T08:27:43Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![chowder](https://avatars.discourse-cdn.com/v4/letter/c/977dab/32.png) [@chowder](https://boards.straightdope.com/u/chowder)\ **Post date:** [September 13, 2008, 8:27am UTC](https://boards.straightdope.com/t/banking-question/463417/1 "2008-09-13T08:27:43Z")
I have a number of bank accounts one of which is an E-saver account which means, among other things, that If I deposit more than £250 per month I receive a higher interest rate on my balance. The thought occurs to me that if I transfer to this account via my online banking the sum of £2000 from another of my accounts and then after this transaction is complete I then reverse the procedure would: A. The bank notice this and not give me the higher interest rate. B. If they don’t notice could I do this any number of times, say 20+ times in a day and gain even higher interest. Effectively depositing in £40K but then transferring it back out again to the original account. C. Most importantly, Is this illegal? ---
**Author:** ![FRDE](https://avatars.discourse-cdn.com/v4/letter/f/e68b1a/32.png) [@FRDE](https://boards.straightdope.com/u/FRDE)\ **Post date:** [September 13, 2008, 8:52am UTC](https://boards.straightdope.com/t/banking-question/463417/2 "2008-09-13T08:52:58Z")
I doubt you would get anything more than a headache. Interest is calculated on the balance at a specific point in time, at most I would expect it to be at the end of day - on the end of day balance. And that is for serious money market type stuff. I’ve looked at a number of these UK extra high interest rate accounts, and to me they stink - there is always a fee, a low maximum balance or some other sneaky trick to make them ‘cheap’. ---
**Author:** ![chowder](https://avatars.discourse-cdn.com/v4/letter/c/977dab/32.png) [@chowder](https://boards.straightdope.com/u/chowder)\ **Post date:** [September 13, 2008, 9:05am UTC](https://boards.straightdope.com/t/banking-question/463417/3 "2008-09-13T09:05:33Z")
I already have a fairly decent sum in the E-Saver account but at the end of each month I only get around £20 in interest which seems pretty piss poor to me. OK it’s £20 but jebus you can’t get much for that can you? I think I’ll give my cunning plan a try, see what happens:cool: ---
**Author:** ![Chez\_Guevara](https://avatars.discourse-cdn.com/v4/letter/c/aeb1de/32.png) [@Chez\_Guevara](https://boards.straightdope.com/u/Chez_Guevara)\ **Post date:** [September 13, 2008, 12:21pm UTC](https://boards.straightdope.com/t/banking-question/463417/4 "2008-09-13T12:21:35Z")
I don’t know about you but when I send funds from one account to another I lose at least 3 days interest while the transfer is being processed by a retarded banking system. If you execute your cunning plan by transferring money back and forth in the manner so described, you will forfeit 6 days interest on the sum in question for each month this is done. You’ll probably find that any increase in interest on your E-Saver account is outweighed by the decrease in interest suffered by the sending account. ---
**Author:** ![chowder](https://avatars.discourse-cdn.com/v4/letter/c/977dab/32.png) [@chowder](https://boards.straightdope.com/u/chowder)\ **Post date:** [September 13, 2008, 12:40pm UTC](https://boards.straightdope.com/t/banking-question/463417/5 "2008-09-13T12:40:29Z")
> [@Chez\_Guevara](#): > > I don’t know about you but when I send funds from one account to another I lose at least 3 days interest while the transfer is being processed by a retarded banking system. > > If you execute your cunning plan by transferring money back and forth in the manner so described, you will forfeit 6 days interest on the sum in question for each month this is done. You’ll probably find that any increase in interest on your E-Saver account is outweighed by the decrease in interest suffered by the sending account. Yes, I had weighed up this possibility but in the interests of finding out what happens I’ve transferred 20 x £2k into and back out of the E-Saver account. I then checked my statement balances and find that all transfers are done instantaneously so it may well turn out that I don’t lose anything from my original sending account. Don’t we have any bankers on the SDMB? ---
**Author:** ![Chez\_Guevara](https://avatars.discourse-cdn.com/v4/letter/c/aeb1de/32.png) [@Chez\_Guevara](https://boards.straightdope.com/u/Chez_Guevara)\ **Post date:** [September 13, 2008, 12:47pm UTC](https://boards.straightdope.com/t/banking-question/463417/6 "2008-09-13T12:47:09Z")
Ah! I’m now guessing that your E-Saver account and the (online) sending account are with the same bank, in which case a loss of interest during transfer shouldn’t be an issue. ---
**Author:** ![TheLoadedDog](https://avatars.discourse-cdn.com/v4/letter/t/35a633/32.png) [@TheLoadedDog](https://boards.straightdope.com/u/TheLoadedDog)\ **Post date:** [September 13, 2008, 12:55pm UTC](https://boards.straightdope.com/t/banking-question/463417/7 "2008-09-13T12:55:00Z")
This sounds a bit akin to transferring a credit card debt from bank to bank to use the honeymoon interest free period. I am led to believe that, in Australia at least, they get wise to this after an iteration or three. In your case, it’s a different scenario and a different country, but I have a feeling they’d be hip to this. ---
**Author:** ![Chez\_Guevara](https://avatars.discourse-cdn.com/v4/letter/c/aeb1de/32.png) [@Chez\_Guevara](https://boards.straightdope.com/u/Chez_Guevara)\ **Post date:** [September 13, 2008, 2:11pm UTC](https://boards.straightdope.com/t/banking-question/463417/8 "2008-09-13T14:11:04Z")
> [@chowder](#): > > Yes, I had weighed up this possibility but in the interests of finding out what happens I’ve transferred 20 x £2k into and back out of the E-Saver account. Which bank operates your E-Saver account? Some financial institutions, _e.g._ Abbey, penalise withdrawals from an E-Saver account by paying a much reduced rate of interest for the month in which the funds are taken out. ---
**Author:** ![chowder](https://avatars.discourse-cdn.com/v4/letter/c/977dab/32.png) [@chowder](https://boards.straightdope.com/u/chowder)\ **Post date:** [September 13, 2008, 2:21pm UTC](https://boards.straightdope.com/t/banking-question/463417/9 "2008-09-13T14:21:00Z")
> [@Chez\_Guevara](#): > > Which bank operates your E-Saver account? > > Some financial institutions, _e.g._ Abbey, penalise withdrawals from an E-Saver account by paying a much reduced rate of interest for the month in which the funds are taken out. Oh bugger, it is Abbey:eek: both accounts ---
**Author:** ![Colophon](https://avatars.discourse-cdn.com/v4/letter/c/f05b48/32.png) [@Colophon](https://boards.straightdope.com/u/Colophon)\ **Post date:** [September 13, 2008, 5:33pm UTC](https://boards.straightdope.com/t/banking-question/463417/10 "2008-09-13T17:33:51Z")
Most _savings_ accounts impose a notice period for withdrawals - typically 30 days, sometimes more. That’s why they pay higher interest than current (checking) accounts. You usually _can_ withdraw money instantly, but you pay a penalty - typically, loss of all the interest for that month. Read the small print and I’m sure you’ll find that’s the case. Anyway, I checked the [Abbey e-Saver](http://www.abbey.com/csgs/Satellite?c=GSDetalleProducto&cid=564084425600528&idParent=1127563079739&pagename=Abbey%2FGSDetalleProducto%2FGS_DetProducto) details, and there’s nothing there about higher interest if you deposit more than £250 per month. The interest rate depends on the balance of the account, and the tiers don’t increase until you have at least £50,000 in there – at which point it goes up from 4.20% to 4.30%. Whoopie! Note to self: if I ever have £50,000 in savings, it ain’t going anywhere near Abbey! ---
**Author:** ![chowder](https://avatars.discourse-cdn.com/v4/letter/c/977dab/32.png) [@chowder](https://boards.straightdope.com/u/chowder)\ **Post date:** [September 13, 2008, 7:29pm UTC](https://boards.straightdope.com/t/banking-question/463417/11 "2008-09-13T19:29:26Z")
[quote=“Colophon, post:10, topic:463417”] Most _savings_ accounts impose a notice period for withdrawals - typically 30 days, sometimes more. That’s why they pay higher interest than current (checking) accounts. You usually _can_ withdraw money instantly, but you pay a penalty - typically, loss of all the interest for that month. Read the small print and I’m sure you’ll find that’s the case. Anyway, I checked the [Abbey e-Saver](http://www.abbey.com/csgs/Satellite?c=GSDetalleProducto&cid=564084425600528&idParent=1127563079739&pagename=Abbey%2FGSDetalleProducto%2FGS_DetProducto) details, and there’s nothing there about higher interest if you deposit more than £250 per month. The interest rate depends on the balance of the account, and the tiers don’t increase until you have at least £50,000 in there – at which point it goes up from 4.20% to 4.30%. Whoopie! I don’t have anything like £50K in my E-Saver account but having checked the terms I find that: 1. If I deposit more than £250 pm I receive and extra 0.5% interest. It does not explain clearly for how long I have to keep up these monthly deposits 2. The letters I have in my possession clearly indicate that at present I am receiving 5.9%. The letters I have show that these interest rates are effective as from Aug. 1st 2007, I can’t see anything that show rates of 4.2% 0r 4.3% in these documents. In all honestly the terms and conditions are written in a language far removed from laymans English ---
**Author:** ![chowder](https://avatars.discourse-cdn.com/v4/letter/c/977dab/32.png) [@chowder](https://boards.straightdope.com/u/chowder)\ **Post date:** [September 25, 2008, 8:29am UTC](https://boards.straightdope.com/t/banking-question/463417/12 "2008-09-25T08:29:40Z")
Having just checked my E-saver balance online I see that I have been credited with interest of £224.56 as opposed to the usual £20. On the face of it my cunning plan seems to have borne fruit:D as I have received £200+ for doing absolutely bugger all other than “fiddling” the system. As a matter of interest, shortly after I had implemented post 5 I received a letter . "We notice that you have recently deposited a large amount into your E-saver account… ---
**Author:** ![Colophon](https://avatars.discourse-cdn.com/v4/letter/c/f05b48/32.png) [@Colophon](https://boards.straightdope.com/u/Colophon)\ **Post date:** [September 25, 2008, 10:36am UTC](https://boards.straightdope.com/t/banking-question/463417/13 "2008-09-25T10:36:23Z")
> [@chowder](#): > > Having just checked my E-saver balance online I see that I have been credited with interest of £224.56 as opposed to the usual £20. > > On the face of it my cunning plan seems to have borne fruit:D as I have received £200+ for doing absolutely bugger all other than “fiddling” the system. > > As a matter of interest, shortly after I had implemented post 5 I received a letter . > > "We notice that you have recently deposited a large amount into your E-saver account… Well, that’s a surprise to me. I wouldn’t go out and spend your ill(ish)-gotten gains just yet, though - I’d say it’s fairly likely someone at Abbey will spot this and “adjust” your balance before long… ---
**Author:** ![Chez\_Guevara](https://avatars.discourse-cdn.com/v4/letter/c/aeb1de/32.png) [@Chez\_Guevara](https://boards.straightdope.com/u/Chez_Guevara)\ **Post date:** [September 25, 2008, 10:52am UTC](https://boards.straightdope.com/t/banking-question/463417/14 "2008-09-25T10:52:08Z")
> [@chowder](#): > > Having just checked my E-saver balance online I see that I have been credited with interest of £224.56 as opposed to the usual £20. Add me to the list of surprised people. Reading post #5, you sent £2K to the E-saver account and then transferred it straight back to the sending account a total of 20 times. It seems that you have been paid something over 6% per month on £40K, yet the cash was only in the account for two minutes. Something doesn’t stack up here. Listen, call the bank and complain that £224.56 doesn’t seem enough and then ask them to explain how they calculate the interest on this account. In so doing, however, you should be prepared for them to admit an error. In the meantime, I’ll download an application form from Abbey, just in case I decide to open an E-Saver account with them. ---
**Author:** ![chowder](https://avatars.discourse-cdn.com/v4/letter/c/977dab/32.png) [@chowder](https://boards.straightdope.com/u/chowder)\ **Post date:** [September 25, 2008, 11:20am UTC](https://boards.straightdope.com/t/banking-question/463417/15 "2008-09-25T11:20:27Z")
Believe me nobody was more surprised than I was when I saw the interest they had kindly given me. As I said in an earlier post, I have letters from the Abbey which I received at the time I opened the E-saver account, these letters quite clearly state that I will receive 5.9% interest. I’ve no intention of phoning the Abbey but I tell you this, if my account is not re-debited with the £200+ within the next 7-10 days I fully intend to repeat my devious plan…again and again and…😃 Heck, I may even get greedy and transfer in/out more than 20 times ---
**Author:** ![Chez\_Guevara](https://avatars.discourse-cdn.com/v4/letter/c/aeb1de/32.png) [@Chez\_Guevara](https://boards.straightdope.com/u/Chez_Guevara)\ **Post date:** [September 25, 2008, 12:03pm UTC](https://boards.straightdope.com/t/banking-question/463417/16 "2008-09-25T12:03:55Z")
> [@chowder](#): > > I’ve no intention of phoning the Abbey… Spoilsport! Good luck to you but take **Colophon** ’s advice and don’t spend any of the cash just yet. Please keep us posted on any fresh developments. ---
**Author:** ![arseNal](https://avatars.discourse-cdn.com/v4/letter/a/ecae2f/32.png) [@arseNal](https://boards.straightdope.com/u/arseNal)\ **Post date:** [September 25, 2008, 3:03pm UTC](https://boards.straightdope.com/t/banking-question/463417/17 "2008-09-25T15:03:48Z")
I don’t get the part about doing it 20 times in one day, why would that give you an even higher rate? ---
**Author:** ![Tastes\_of\_Chocolate](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tastes_of_chocolate/32/3232_2.png) [@Tastes\_of\_Chocolate](https://boards.straightdope.com/u/Tastes_of_Chocolate)\ **Post date:** [September 25, 2008, 3:18pm UTC](https://boards.straightdope.com/t/banking-question/463417/18 "2008-09-25T15:18:36Z")
Am I reading that correctly? You all are getting between 4 and 6% interest in a savings account? If I keep $25k in an account, my bank is currently offering 1.6% interest. Savings account below that are paying 0.1% to 0.5% ---
**Author:** ![chowder](https://avatars.discourse-cdn.com/v4/letter/c/977dab/32.png) [@chowder](https://boards.straightdope.com/u/chowder)\ **Post date:** [September 25, 2008, 4:10pm UTC](https://boards.straightdope.com/t/banking-question/463417/19 "2008-09-25T16:10:28Z")
> [@arseNal](#): > > I don’t get the part about doing it 20 times in one day, why would that give you an even higher rate? Because on the face of it it seems that I am depositing £40K. To answer **ToC** It is not an ordinary savings account ---
**Author:** ![groman](https://avatars.discourse-cdn.com/v4/letter/g/73ab20/32.png) [@groman](https://boards.straightdope.com/u/groman)\ **Post date:** [September 25, 2008, 4:51pm UTC](https://boards.straightdope.com/t/banking-question/463417/20 "2008-09-25T16:51:25Z")
> [@chowder](#): > > To answer **ToC** It is not an ordinary savings account I think **ToC** is in the US (correct me if I’m wrong). Even the best savings accounts in the US have sunk below 3.5% because of the prime rate cuts. Looking around my banks I can get between 0.10% and 3.30% on savings accounts, and 3.75% on a 5-year CD. [Next page](https://boards.straightdope.com/t/banking-question/463417.md?page=2)