Does anyone transfer some or all of their interest-free overdraft into a savings account? My student account is Natwest, and my overdraft is a huge £1250 which i would never have to reach (never gone overdrawn by more than £400). It's nice knowing it's there, but it would be nice to gain a bit of interest on it if i don't really use it. I also work part time, and have a current account with Barclays in which my wage goes into, and seeing as though i save most of my wage i have just opened an e-savings Reward account with Barclays with a 2.27% interest rate when no money is withdrawn during that month, and 0.85% if i do withdraw. I want to build it up in case i want to go on holiday or just want something there in case i need it.
I've put £500 of my overdraft (or my balance, my rent will therefore come out of my overdraft eventually) into this account along with other savings so i can gain interest (i now have £800).
Do you think this is a good idea? I feel a bit iffy doing this but this account is with another bank and most withdrawals come out of my Natwest and is still used as my main account.
I did this with 3k worth of halifax overdraft, unfortunately my ISA interest rate dropped from 6% to 1% because they could so I bought a car instead.
I do this. Not worth it so much since the rates have come down though.