Is there a name for this system?

chipstss on 11/02/2015 - 13:17

I was thinking of ways to improve security for debit card purchases and I came up with something like this

  • 1 empty back account
  • 1 debit card tied to your empty bank account
  • 1 main account with your money

When purchase needs to be made you instantly move money from your main account to the empty account with only the amount of money that needs to be used for the purchase. The money that is used is only on your debit card for a short period of time and this prevents your card from being used willy nilly if it gets stolen either in real life or online. Does it makes sense? Is there a system already like this?

Financial

Comments

  • tomorrows_angel on 11/02/2015 - 13:23
    +3

    I do this all the time. They're just linked accounts with the same institution. The second account I have was a high interest savings account, but these days it's an offset against my mortgage. My debit card usually never has more than $100 in it and it takes seconds to move money across if I need it.

  • cupcake on 11/02/2015 - 13:38

    It's a good idea. I already do this. Just open up a new account with your bank when you apply for a debit card and link it to new account. Easy to transfer money into it when you want to use your debit card. I don't know what the name for this system is but it seems only clever people do this :D

    Please note: It's a lot easier if you have Internet banking. I say this because not everyone does internet banking!

  • jaybmate on 11/02/2015 - 13:44
    +4

    No real need as all the main banks cover you if you get your card stolen etc. obviously dont have your life savings in there but no issue having around 1k in there at any given time.

    • tomorrows_angel on 11/02/2015 - 13:47
      -2

      Not true in terms of interest. Usually the transaction accounts have very poor interest rates, so if you have a lot of money then you're better of leaving it in a higher interest internet savings account linked to your transaction account and actually making a little bit of money off it.

      • jaybmate on 11/02/2015 - 13:53

        with 1k it wouldn't be very much. if your using ubank /ing youd only be saving about $3 per month. but really its less than that because the $1000 would be reducing as you spend it etc. I think the convenience of just being able to buy something on the spot outweighs the worrying about transferring every time to make a purchase / making sure you have enough phone battery to do it etc.

        Anyway OP was talking more from security angle than amount of money saved.

  • Davo1111 on 11/02/2015 - 13:54
    -1

    TIL people dont already do this.

  • Paul Atreides on 11/02/2015 - 14:00
    +3

    sounds like ubank saver (main account) and ubank ultra (empty account) to me. if you have $0 in your account, it sweeps the money real time automatically from your main account so you can fulfill the transaction

    but you are required to have $100 in your ubank ultra, but what you can do is setup an automatic transfer to reverse the sweep.

    this does not prevent your card being used "willy nilly" if it gets stolen, since its tied to your mainaccount.

    • Davo1111 on 11/02/2015 - 15:03

      Doesnt have to be automatic. I just do it manually between an everyday account and a "high interest" account.

      I keep it topped with say $400. Then replenish the amount when paying off a credit card or taking cash out.

  • Agret on 11/02/2015 - 15:55
    +1

    I'm with Commonwealth Bank and only keep a little bit on my debit card (around $500) and the rest in the NetBank saver. There is no interest earnt on the debit card so no point keeping huge sums on it. There are no fees for having a NetBank saver account. I have the app on my phone and just transfer over the money if i'm going to be making a large purchase (PC parts for example). After my NetBank saver reaches a certain amount I just transfer the "excess" to my UBank saver account because it has better interest. With UBank you can create as many new accounts as you want on the web interface and it costs you nothing. You can use each account to save towards certain goals, it's a pretty good way to manage your money.

    • danyool on 12/02/2015 - 13:45

      With UBank you can create as many new accounts as you want

      But don't you only get the bonus interest on one Saver account linked to Ultra? Ie One gets 4.02%, but the others only 2.96% I held off opening multiple accounts for this reason, even though the goal idea sounds good.

      • Agret on 13/02/2015 - 12:22

        Yeah that's true you only get the bonus interest in one of them so probably best to stick to using a spreadsheet to track your goals.

  • kikxz on 11/02/2015 - 16:53
    +1

    it sounds like a similar system to the one Ubank provide

    https://www.ubank.com.au/transaction-accounts#how-it-works

    the video on the site says its all done automatically

    • chipstss on 12/02/2015 - 11:30
      +2

      Automatically makes it vulnerable if your shit gets stolen.

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