£2500 Current Account Ceiling

To limit the amount of interest they pay, naturally. But I have to say I think it is not so healthy to have a large amount in a current account. I am sure different account types evolved as they did for a reason.

At 15:23:28 on 04/03/2007, Will delighted uk.finance by announcing:

I reckon it's got something to do with accounting processes where the balances held in current accounts must be available immediately whereas they can move savings money around. BICBW.

In message , Will writes

Its just a marketing thing to get them in the best buy tables. They dont want to pay out too much high interest on high balances so they limit it. In addition paying high interest on an instant access account leaves them vulnerable to instant withdrawals if a competitor comes along and they could see large outflows of dosh.

Thanks

Will

As John Boyle say its a marketing thing, gets them in the best buy tables AND makes people switch current accounts from another provider. Having said that 2.5k is quite a large baance to have in a current account (well it is for mine!) and being with the Halifax if the balance gets higher than that I transfer any excess into the halifax websaver account which gives a decent return on balances above 2.5k of 5% and to which I can transfer immediately cash backwards and forwards without any delays.... its just a question of keeping track of the balance.

Just another ball to keep your eye on I am afraid.....

And keeping track of the interest rates.

I would not be taken in by any of the inducements to change current account. The only exception would have been the late-lamented Zurich(?) account that guaranteed to match base rate. AFAIR they reneged on this guarantee and had to pay people compensation.