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2 Account System

April 14th, 2006 at 10:54 am

For quite a while now, I have been using a 2 account system for my regular ingoings and outgoings. Basically, I have a regular current account with a large UK bank. The interest on this account is negligible, but it provides me with a debit card, free cheque book and free overdraft. I also have online access to this account. With the same bank I have an online only instant access savings account, which has unlimited withdrawals and instant online tranfers to my other accounts with the same bank. It also has a much better interest rate. (I'm talking a difference between 0.1% and 4.2%) As soon as my salary hits my account in themiddle of the month, I transfer it to my savings account, and then as I need the money to pay out rent and things, I draw it down into my current account. I also draw down an amount each week to cover any spending on my debit card - groceries and such. At the end of the month, I transfer any remaining money to a savings account I have with a different bank (one that is much less easy to access, but has a slightly better interest rate - the difference in the interest rate doesn't matter to me as much as the fact that I can't just get at that money whenever I want) This system has been working well for me for a while, as I actually make some interest on my salary while it's sitting in my account. I have also discovered that once the excess money is in my second savings account I almost never use it, even in emergencies (what it's there for). I usually just find that money from somewhere else - perhaps by going superfrugal on mygroceries for a while, or forcefully calling in any loans to friends and relations!
I also use my first savings account for the regular monthly amount I put away for gift buying, car maintenance and road tax, and regular health items (sight tests and dental check ups). This isn't working so well for me at the moment. I don't like having the 2 sets of money in the same place - it's just so untidy. I've resorted to keeping a note on a scrap of paper to remind me how much should be in my "regular expenses" account. And I keep losing it! It's not possible to "subaccount" money with this online account, so maybe it's time for another savings account?

3 Responses to “2 Account System”

  1. kristina moffitt Says:

    i have multiple savings accounts all linked through online banking. One for xmas, one for xxx, one for xxx etc. while the interest might not be very much it is easier for me to keep track of. and these accounts aren't for any long term savings, they are for quartely house insurance or birthday and christmas money etc. It works very well for me to know what is for what without having and option to hve it all comingled. I also have another account at another institution for longer term saving: house account and future newer car and my emergency account.

  2. baselle Says:

    I do something similar: I have a checking account and a savings account (and now a CD) at my brick and mortar bank, a strictly online savings account, a savings bond account.

    I think your basics are okay: put the paycheck in the savings account, take out a budgeted amount to put into checking, then spending. What I don't get is the sweep part at the end of the month. You are taking all leftovers from the checking acocunt to put into the second savings account? It could work, but it does require vigilance.

    Why not just put all your sweep money in the first savings account, then as the first savings account rises, add to your position on the second savings account from the first savings account, rather than the checking account? You get the safety of having something always in the checking account, but you also getting the feeling of progress as you move chunks of money out into the second savings account.

  3. julie Says:

    I am writing from WCBS-2 in New York. I was wondering if anyone is making money by doing this? Specifically moving money between online accounts.

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