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New A&L Current Account For 16-21 Year Olds
mleonard79
Posts: 1,616 Forumite
Hi Everyone,
Alliance & Leicester have just launched a new version of their Premier and Premier Direct Current Accounts today but this one is for 16-21 year olds and is called Premier 21.
You have to be able to pay in £250 per month to be eligible for the account and it offers a credit interest rate of 10% AER for balances up to £1,000 fixed until 31.07.08 and then reduced to 1% below the Bank of England base rate after that (4.25% at the moment.) A 0% overdraft is also offered for the life of the account (It's essential to watch the small print with this though as there is a £25 charge to set it up, a £3 fee per month if you use it and a £3 per day charge if you go unauthorised overdrawn so it's best avoided really.)
The account is also being included in their Recommend A Friend Scheme so you can get referred for it by another Premier 21 Account holder for £15 each or by a Premier/Premier Direct Account holder (but in this instance the 16-21 year old being referred gets the full £30 and the referrer gets nothing.) If anyone wishes to offer or request referrals for this make sure you do so on the A&L threads on the referrer's board though.
You can also get the £10 on offer for registering your account for mobile banking that is explained Here.
Here is the A&L Press Release (Pdf) and an Easier Finance Article on the new account. At first glance it seems like a good deal at least for the first year to get the 10% on £1,000.
Regards
Michelle
Alliance & Leicester have just launched a new version of their Premier and Premier Direct Current Accounts today but this one is for 16-21 year olds and is called Premier 21.
You have to be able to pay in £250 per month to be eligible for the account and it offers a credit interest rate of 10% AER for balances up to £1,000 fixed until 31.07.08 and then reduced to 1% below the Bank of England base rate after that (4.25% at the moment.) A 0% overdraft is also offered for the life of the account (It's essential to watch the small print with this though as there is a £25 charge to set it up, a £3 fee per month if you use it and a £3 per day charge if you go unauthorised overdrawn so it's best avoided really.)
The account is also being included in their Recommend A Friend Scheme so you can get referred for it by another Premier 21 Account holder for £15 each or by a Premier/Premier Direct Account holder (but in this instance the 16-21 year old being referred gets the full £30 and the referrer gets nothing.) If anyone wishes to offer or request referrals for this make sure you do so on the A&L threads on the referrer's board though.
You can also get the £10 on offer for registering your account for mobile banking that is explained Here.
Here is the A&L Press Release (Pdf) and an Easier Finance Article on the new account. At first glance it seems like a good deal at least for the first year to get the 10% on £1,000.
Regards
Michelle
:hello: :hello: :hello:
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Comments
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So the 10% rate lasts until the end of July next year. It makes a good little savings account for £1000 in the first 15 months.
The overdraft looks awful, though, especially if you get the guaranteed minimum of £250 - at £3 per month, that would equate to an overall EAR of at least 14% even if fully utilised over the whole period. But if you just slipped slightly into the red for a few days in a month, you'd end up paying a lot more than that in percentage terms. That's not including the arrangement fee. That table in the press release is a PR masterpiece - I wonder how long it took them to come up with the headings that make its overdraft look like the best deal, when IMHO it is the worst of the lot.0 -
The overdraft looks awful, though, especially if you get the guaranteed minimum of £250 - at £36 per year, that would equate to an APR of at least 14% even if fully utilised over the whole period. But if you just slipped slightly into the red for a few days each month, you'd end up paying a lot more than that in percentage terms.
Hi Masonic,
I totally agree with you here - I would caution people to avoid the overdraft too which is why I've flagged up the fine print (and yes it is a PR masterpiece but aren't they all?! :rolleyes: ) As it's an account for 16-21 year olds I doubt they would get much of an overdraft anyway and I really think it's better to be avoiding something like that til you're older!
Of course for students going to uni at 18 onwards an overdraft is often essential but in that instance they can apply for student accounts with student overdrafts so this wouldn't be the account for them anyway.It makes a good little savings account for £1000 in the first 15 months.
That's exactly my take on it too - use it as a savings account and get the refer a friend money as it's a very good rate and worth doing if they've got the cash to put in it for the 15 months.
Regards
Michelle:hello: :hello: :hello:0
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