A report published this weekend by consumer group Which?

 

A report published today by consumer group Which? claims savvy couples with £17,500 in savings could be earning £1,000 in interest - or a rate of 5.7%.

But before rushing to subscribe to the "money-saving guide packed full of expert tips and tactics", readers might want to note that this tactic involves opening nine different bank accounts, and operating them all simultaneously.

For a single person, the £1,000 dividend only comes if you open six accounts with different banks and have over £30,000 of spare cash - to earn a rate of 3.1%.

According to Which? it is all about gaming the market in high-interest current accounts.

It says: "You can earn far more interest than any conventional savings account offers, as long as you're prepared to put the time into opening several different accounts and moving money between them."

But some of the fabulous returns are only temporary, as initial offer rates expire, and all involve intricate operations.

Both Nationwide (FlexDirect) and TSB (Classic Plus) offer a savings rate of 5%, but it is limited to balances of £2,500 and £2,000 respectively. The Which? solution is to open three separate accounts, two single and one joint, with each bank, to treble the overall limits on a couple's savings. However, the Nationwide rate only lasts for 12 months anyway, when it drops to 1%.

Similarly, two accounts could be opened at the Halifax, says the guide, which pays £5 a month on its Reward account and a £125 bounty for using its switching service. That bonus also drops out of the equation after a year, and triggers a range of issues around which account you would nominate to be switched, how many direct debits would have to be moved, and how to ensure the minimum required amount is fed into each account each month.

That is particularly relevant at the last port of call Lloyds, where the Club account needs a £1500 a month deposit to qualify for its 4% interest rate on balances up to £4000.

A single person is advised to open one account at those four banks plus a further two at Tesco Bank, which pays 3% on balances up to £3,000, and Santander.

The Spanish bank's 123 account is by far the most generous in allowing you to rack up decent interest without strings attached, as it pays 3% on balances of £3000 all the way up to £20,000, asking only for two direct debits and a £500 monthly deposit. The account has a £2 monthly fee which can be offset, and more, with a cashback offer on paying utility bills through the account, giving more potential earning power. The tiered interest rates mean that (excluding the fee) it is paying a rate of 2.38per cent on £20,000. The latest switching figures suggest that for most people, opening one new high interest current account is probably enough.

Meanwhile Royal Bank of Scotland is currently transferring around 140,000 RBS and NatWest customers to a different account, with over 40,000 likely to find their overdraft more expensive.

The switch to the Select account will mean around 30 per cent of customers paying £5 a month more for going into the red, the bank admits.

RBS however says it is all part of its 'fair banking' roll-out, which has seen it scrap 'teaser' rates on both savings and credit cards.

The bank says: "This is just one step we're taking to remove complexity for customers and rebuild their trust."

Meanwhile the Cooperative Bank, which reported last week that it was in slow recovery from its financial traumas, also has trust to rebuild. It has just sharpened up its current account with improved borrowing terms.

For unapproved borrowing, the steep daily penalty is cut from £20 to £10 and the maximum quarterly charge from £150 to £60. It has scrapped a £20 annual arrangement fee and the £15 charge for an unpaid item when things go wrong. There is also a £20 buffer before the fees kick in (with interest at 18.9per cent) and a six-day amnesty once a year to allow a return to agreed borrowings.

But savers continue to get a very average deal with the bank's 'Savings Plus' account paying 0.5 per cent.

RBS and the Coop are among the majority of banks which saw a net loss of customers last year from the new seven-day switching service, which encouraged a record 1.1m people to take the plunge and ditch their bank.

The two big winners were Santander and the Halifax.

A new comparison tool devised by Gocompare.com enables customers of most banks (nine so far) to use their personal banking data to analyse their spending and savings habits.

It makes use of a 12-month record called "midata", which is stored online by your bank, and can be downloaded and dropped into the comparison tool.

The process protects personal data and instantly illustrates the benefits or costs of switching to different accounts, spread over one to five years.

CASE STUDY

Steve O'Connell and his wife Karen took out a mortgage last year with Santander and opened a joint 123 account, which offers 1% to 3% cashback on council tax, broadband and energy bills. Steve, who works for an Edinburgh-based investment company, says: "We have a £200 overdraft agreed to give us a buffer, and there's a £2-a-month account fee, but it has more than paid for itself over the 12 months." For Steve it was a case of financial loyalty paying off, as he opened his first bank account as a student with Abbey National, which was swallowed by Santander in 2004. He says the bank's local service has been impressive and Karen is now opening her own 123 account.