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Confessions of a Rate Tart

The interviewee’s identity has been obscured for their own protection

I have 26 bank accounts. I never meant for it to happen but it has. Fourteen are current accounts, eight savings, and four are cash ISAs.

That’s not counting the credit cards, broker accounts and other stuff I can’t remember any more.

For a long time it seemed normal. I only realised I was different when it slipped out recently in conversation. One friend said they were shocked.

That’s when I looked at myself in the mirror and I saw what they saw.

I’m a rate tart. I open bank accounts for money. For their competitive rates of interest. Once they’ve outlived their usefulness, I move on to the next. No emotion, no goodbyes, no looking back.

It’s just a transaction, right?

You know you want it

Nobody starts out thinking, “I want a massive collection of bank accounts.” You don’t think to yourself, “Wouldn’t it be great if I was the Imelda Marcos of online passwords?”

You start off small-time:

“I just want to get ahead.”

“I won’t have to do this forever.”

“It’s easy money.”

“Just one more won’t make any difference.”

And it’s so easy to find everything you need to get into it.

A Best Buy table puts you in touch with the right people. Even if you only look at it once a month, temptation soon comes your way.

And if you’re nervous – maybe it’s your first time – there are plenty of old hands out there to show you the tricks. You’ve just got to know where to look.

You open your first account and they pay you a sweetener to lure you in. An extra £100 or so because you’re fresh.

In the early days I was pulling down a few hundred extra quid a year in bounties alone.

But by the time you’re using a spreadsheet to keep track of it all, and standing orders to keep the money moving, and Google alerts so you don’t stay in the same place for too long…

…well, you know you’re not with Virgin anymore.

The rules of the game

I guess a lot of people don’t even know it’s possible to live like this. I read the stories in the papers about people getting 0.25% on their money and I laugh.

It’s not like that where I’m from. I can get you 3%, 4% easy.

It seems like a no-brainer when you put it that way. But not everyone could live the way I do.

There’s a price to pay, y’know? You’ve got to do certain things.

You need a bit of capital for a start.

£1,000 that you move from Peter to Paul – because you’re using current accounts as savings accounts. It sounds wrong, but that’s the way the world is these days. I didn’t make the rules, I’m just showing you how to work ‘em.

So everyone wants a piece of the pie, but you just give them the same old slice and keep it moving through the system so they don’t notice. Or maybe they do notice, I don’t know.

What I do know is: they don’t care.

Some places, the more ‘respectable’ ones, they like to make things harder. They want extras like direct debits on every account.

That’s easy. Just use a feeder savings account that sets up direct debits. There aren’t many, but you can find them, and you just channel £1 a time from one account to the other and back again. It’s like plumbing.

And if someone offers you a complimentary regular savings account – take it. You can get up to 6%! Sure, it’s only on a small bit of money, and they’re not as easy to get now, but you might as well take everything you can get.

Don’t forget cashback. Generally only the Spanish ones are into this, but look, as you get older you can’t afford to be too fussy, alright?

Money for old rope

What most people don’t realise is that you can double-dip. Triple-dip even.

Let’s say you can get 3% from a prospect but only up to £5K. They might allow you to open multiple accounts. Now you can get a good rate on £15K.

And the same people might go by a different name, so you can stash away another £15K.

And maybe they have yet another name. It’s more common than you might think. Everyone’s got something to hide, but that’s another story. Anyway that’s another £15K taken care of.

Just be careful you know who’s who and never trust anyone with more than £85K, no matter how many IDs they’ve got.

It helps if you’ve got a partner. It’s more lucrative if you work in pairs, y’know? You can cover more ground, recommend a friend, all that.

But even that will cost you. After a while, your ‘friend’ may not thank you for dragging them into your world.

Some people worry about their reputation: ruining their credit score and that kind of thing.

You’ve just got to keep your head down. Take it easy and don’t take on the whole world at once.

Keep it as straight as you can. Ditch old accounts when the interest drops… refuse overdrafts, credit cards, rates that are too good to be true, accounts with benefits… Stay away from the weird stuff, keep on moving, and you’ll be okay.

Don’t judge me

That’s pretty much all you need to know. Maybe more than you wanted to know, right?

Am I proud of it? Listen, I blame the Government. I didn’t ask to live in a zero interest world. Funding for lending has only made things harder.

I didn’t grow up dreaming of this. It’s not how I thought things would turn out.

You’ve just got to do what you’ve got to do. That’s it.

The Confessor

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{ 26 comments… add one }
  • 1 Shameless Switcher December 3, 2013, 10:22 am

    That sounds suspiciously like active savings to me.

    I think there is probably a memorable word for this condition 😉

  • 2 living cheap in London December 3, 2013, 10:23 am

    so here’s a question: would you remove money from an ISA wrapper performing at a lower rate to take benefit of the higher rate?

  • 3 Grumpy Old Paul December 3, 2013, 10:34 am

    Calculating your interest for your Self Assessment Form must be fun!

  • 4 Elbow December 3, 2013, 11:04 am

    26 accounts…wow! Not sure where the tipping point is between you making the most of your money and your money taking the most of you…..but I reckon managing 26 accounts must be pretty close to it.
    +1 GOP!

  • 5 BeatTheSeasons December 3, 2013, 12:09 pm

    I admire you for making this work and thank you for writing the article, but I do worry this introduces all kinds of unpredictable risks to your finances.

    Last time I tried this kind of thing I chased cash ISA rates all the way to Icesave, which promptly went bust. My tarting activities compounded the problem because I’d also switched my current account in the meantime so I had to wait several months for a cheque from the FSCS.

    You also have to wonder if any of this will set off alarm bells with the underwriters when you apply for a mortgage.

  • 6 China Nigel December 3, 2013, 12:41 pm

    Excellent, well written and original piece!
    You might possibly have difficulty in remembering all the logins/passwords!
    I have found Lastpass works well for that.

  • 7 Dom December 3, 2013, 1:52 pm

    Well, I feel like a rookie now, I ONLY have 8 current accounts!

    The first direct £100 for sign up is next on my target list though so more to come soon.

    Also with the end of my “high” fixed rate cash ISA I’m pondering whether to lose the wrapper and move it to a current account, especially as I will be earning bum all after the rate drops.

    Something to ponder over the weekend I feel.

    Dom

  • 8 L December 3, 2013, 2:19 pm

    A TV adaption with Billie Piper on the cards?… No?…

  • 9 The Accumulator December 3, 2013, 2:24 pm

    @ Shameless – ha ha! Very good.

    @ Grumpy – The, ahem, Confessor, says self-assessment is easy as long as you keep track of it on a spreadsheet (more fun than it sounds) or keep your tax notices from the bank(s) in one place.

    @ Living Cheap in London – I’m grappling with this one right now. I’m reluctant to do so, but give it another 2 years of this and I probably won’t worry about it at all. I probably won’t be filling up all my cash ISAs in the future, which makes it easier.

    @ Elbow – it’s a hobby 😉 That said, it does take a certain mindset. Possibly an unhinged one. It can be painful from time to time but mostly it’s like anything else, just chugs along once you’ve set it up. You do need to be organised though.

    @ Beat – yes, we’re all much wiser about this now after Icesave. A reasonable rule of thumb is that the institutions offering the highest rates are the weakest. So think twice about the too-good-to-be-true offers and anyone who isn’t part of the UK or EU deposit protection scheme. And don’t commit all your funds to one institution.

    Re: credit score – I’ve not had a problem with it. Savings accounts don’t count against the score and I haven’t found any definitive information that says current accounts do. So I just follow some simple precautions: refusing items that would show up on the score e.g. credit cards and overdrafts, and spacing out applications. I have a mortgage but if I was due to apply for one then maybe I’d lay off the applications for a while.

    @ China Nigel – thank you for the Lastpass recommendation. I haven’t used password aggregation services myself but I know a few people who swear by them.

  • 10 Grand December 3, 2013, 2:59 pm

    I thought about the idea of doing this for some time… given my ISA pays less then %2 and Inflation is running above that. If it is one thing that this site and books I’ve read because of it is that you should be having your money work for you. On that note I need a Vantage Account which I plan to move the interest from Nationwide into.

    Thank you and I believe to Emma for originally bringing this topic to light.

    Grand

  • 11 Grand December 3, 2013, 3:05 pm

    Given I often read this site at Lunch time, I typically try to share what I discover with my colleagues. They think you’re particularly barmy @ The Accumulator 🙂

  • 12 dearieme December 3, 2013, 4:10 pm

    Having our emergency money in interest-bearing current accounts has made us happier to tie up our Cash ISA money in fixed-term accounts that beat inflation. (Unhappily these latter are drawing to an end.)

    The best accounts that we’ve found recently are, as it were, account-equivalents: deferring her State Retirement Pension and taking the reward as extra pension is an annuity-equivalent for my wife; deferring and taking my reward as a lump sum is a savings-account equivalent for me. No wonder HMG is going to knock this scheme on the head.

  • 13 KingofCornwall December 3, 2013, 6:31 pm

    After paying off my ratetracker offset mortgage I asked the bank to close my account. The response was that I couldn’t and it had to run the full term, even if the balance was zero until then. Soon after, they sent me details of a new fixed rate account paying 2% more than the borrowing rate on my mortgage. Now I thought, would the bank be stupid enough to let me re-initiate my full mortgage and put the whole lot into their fixed rate account. It turned out they would. Two whole years of riskless free money and counting. This is a crazy financial world we are living through.

  • 14 Marco December 3, 2013, 8:04 pm

    KingofCornwall be careful if you are above the FCSS limit for compensation, which I guess you will be if your entire mortgage amount is in a bank account.

  • 15 An Admirer December 3, 2013, 9:37 pm

    Hardcore.

  • 16 KingofCornwall December 3, 2013, 9:51 pm

    Thanks for the advice Marco, but no need to worry. Only three years left on my 25 year mortgage. Back in 1991, you were considered a high earner if 2.5 times salary came to as much as £85,000.

  • 17 DIY Income December 3, 2013, 11:41 pm

    Clever article – never did saving seem so film-noire.

    If you get fed up with this account diversification, you could move it all to Ratesetter and get 5.6% (assuming you can commit to 5 years).

  • 18 HalfFull December 4, 2013, 1:48 am

    Re the 6% which is a regular saver account;- it is in effect 3.25% on a lump sum of £3600. For those of us who want to wring every drop of interest out of our cash there is are some calculators http://www.thisismoney.co.uk/money/saving/article-1633419/Monthly-lump-sum-savings-calculator.html to help see how much you are going to make if you have a lump sum compared to a regular saver.

    OK I just went and added up my bank accounts with 6 different institutions and it came to …. 13 in my name and 11 in joint names. Sigh I guess that makes me a Rate Tart too

    @DIY Income – Re Ratesetter – you don’t actually get say 5.6% if you loan one lump sum of money at one time for 5 years. What happens is you get capital and some interested repaid every month (like a mortgage in reverse) and you have to then lend this out for 5 years too. This happens every month on every sum that is relent so at the end of the year you get an effective annual rate of say 5.6%. This means that the dates of final repayment continually become 5 years ahead every time repaid lumps of money are relent out.

    If you lend for one month or one year on Ratesetter then you get the interest and the lump sum back at the end.

    And yes I have money with Ratesetter as well.

  • 19 Steve December 4, 2013, 2:09 pm

    OMG!
    I used to have about six and my Mother used to have a few but when she died I realised that if I ever croaked it no one would know how many accounts and with who,and this made me neaten everything up.
    Now I just have 2 and 2 broker’s this is far better for me as tax return time is a nightmare with lots of accounts especially if you loose any statements.
    I might not be earning as much as you but I don’t keep big cash balences as most is fully invested in shares/property.
    You have a complex set up that someone else might not follow!

  • 20 The Accumulator December 4, 2013, 10:14 pm

    @ Grand – I don’t blame them. Maybe I should check myself in.

    @ L – hee hee.

    @ Steve – you’re right. And though I hope time is on my side I have put together a letter that would enable Ms Confessor to work everything out should that ever be necessary.

    Also a good old spreadsheet can put everything in order, especially when it comes to working out tax.

  • 21 SemiPassive December 5, 2013, 12:29 pm

    Fannying around with cash accounts may become more appealing in these low return times. But I love the simplicity of just a couple of Cash ISA accounts and offset mortgage savings.
    I know it is a short time span but over the past week shares, gilts, index linked gilts and gold have all dropped, sometimes all on the same day. So much for inverse correlation.
    To me this highlights why you should always have some cash in your asset allocation, even though it is a struggle to keep up with inflation.

  • 22 Kingofkelsall December 6, 2013, 12:25 am

    @kingofcornwall – can I ask which bank you have/had your mortgage with? Two reasons: firstly, i own a few bank shares and this type of muppet-like lending policy would concern me as an owner and, secondly, where there’s risk-free money on offer…(!)

  • 23 Cantab December 7, 2013, 3:14 am

    I make my tally 37, though I may have forgotten a few. I have about 12 I use on a regular basis, and a regular first-of-month diary note to parade my cash around 6 of them, which takes about 20 mins. I think I’m up about £300pa on this scheme. The cash isn’t even mine, it’s the balance on a 0% credit card that I’m gradually building up.

    The most tedious thing is the paper it generates. I get about 3 bank letters a day, often stupid things like changes in T&C. Most banks have terrible electronic statements so I stick to paper statements wherever possible. I’ve kept every bank statement I’ve had since I was 7 years old and these now take up about a metre of shelf space. I think current rate is about a lever arch file per year. One decade I might around to scanning them.

    Now if banks didn’t make it so hard to close accounts, I might not have so many idle ones. So it’s their own fault they keep sending me paper at their own expense…

  • 24 Plunt December 13, 2013, 10:41 am

    okay, so i read this and though, oh no, this is how i started….. you summarized it very well!

  • 25 BeatTheSeasons February 7, 2014, 5:55 pm

    Earlier this week a Personal Banking Advisor in branch was actively encouraging me to adopt some of these techniques. She said they have lots of couples who have deposited a total of £30,000 in the 6 current accounts they are allowed to open between them, with just £1,000 circulating around the accounts each month to trigger the 3% interest. She didn’t mention that you could open a further 12 similar accounts at their two offshoots to triple the eligible balance to £90,000.

  • 26 Returned expat December 9, 2014, 7:45 am

    Wow… My other half called me a bank account tart, however I bow down before the master and have found myself humbled.

    I promise to redouble my efforts and try harder. My wife has been sent this article.

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