Update! Santander First Home Saver Account: 5% on up to 50k savings (up to 35 only)

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edited 8 September 2011 at 11:18PM in Savings & investments
UPDATE: 9 SEPTEMBER 2011
This account has been withdrawn from the market by Santander and is no longer available for new applications (existing accounts are unaffected). The interest rate is still 5% and will remain so until further notice but is likely to fall steadily. I'll post back here if I notice it dropping.

Original post follows:

Further to the discussions (here:
http://forums.moneysavingexpert.com/showthread.php?p=27583661)

I have managed to squirrel away about £40k in my Santander First Home Saver account at 5%, despite the fact that you're supposed to be restricted to a £5k initial deposit plus £300/month. :)

I did this by opening the account with the minimum deposit of £100, and then towards the end of the month paying in a £40k deposit. For the rest of that month only you get 0.1% (hence paying late in the month) and then 5% interest going forwards.

This is within the rules, which say that you should save up to £300/month but that any month in which you pay in more than £300 will only get interest at 0.1% for that month only.

Go here for the account: http://www.santander.co.uk/csgs/Satellite?appID=abbey.internet.Abbeycom&canal=CABBEYCOM&cid=1210611105334&empr=Abbeycom&leng=en_GB&pagename=Abbeycom%2FPage%2FWC_ACOM_TemplateB2

Note that:
(i) you are supposed to be a first-time home buyer (but they don't check, other than making you sign a declaration that you don't own a home - but it would almost certainly be fraud to make a false declaration)
(ii) you can only get the account if you are under 35 at the date of opening (the account doesn't then close when you reach 35, of course)
(iii) you need to do a 'mortgage interview' before closing the account and withdrawing cash - this just means visiting a branch for a quick chat, no credit search required, and no need to take out a mortgage (just say you're not interested)
(iv) you cannot make partial withdrawals - to get money out you need to close the account completely and
(v) Santander say they "may" close the account if you pay in more than £300 in a month (but they haven't with my account!)
(vi) maximum account balance is £50k (although there is a chance this will not be enforced...)

*Further edit - 13 November 2010* I can confirm that this loophole still works and is definitely available. The loophole is not really 'in the spirit' of the savings account, but it's definitely within the letter of the rules and in practice it works so if you're under 35 I say go for it.
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Comments

  • antispam246
    antispam246 Posts: 941
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    Can you verify you're actually get 5% the following month (I know it maybe too early too tell, unless you've had the account awhile)? If this is the case, that's bloody fantastic. Hell, I'd be able to clean up my multiple accounts and consolidate for once.
  • [Deleted User]
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    edited 13 June 2010 at 12:02PM
    The interest rate on the account is 5% so that's what's being paid. Santander's only other option is to close the account. In any month with overpayments the interest drops to 0.1% but then reverts to 5%.
  • fairmorn308
    fairmorn308 Posts: 1,530 Forumite
    I have been looking at this. I currently bank with A+L which are part of the santander group. Would i beable to access this account within my A+L Account screen?
  • Essex123
    Essex123 Posts: 150
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    No. The ex-Alliance & Leicester systems are still seperate to Santander's. It might be possible once A&L Current Accounts are migrated across to Santander's platform.
  • thepearce
    thepearce Posts: 2,287
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    Interesting - I saw it mentioned but quickly countered with the threat of account closure.

    Actually - over-funding might be a good way around bothering with a mortgage interview when you want your money back (if they close the account).
  • amictus
    amictus Posts: 301 Forumite
    Can you verify you're actually get 5% the following month (I know it maybe too early too tell, unless you've had the account awhile)? If this is the case, that's bloody fantastic. Hell, I'd be able to clean up my multiple accounts and consolidate for once.
    The interest rate on the account is 5% so that's what's being paid. Santander's only other option is to close the account. In any month with overpayments the interest drops to 0.1% but then reverts to 5%.

    As far as I know, interest is only paid into your account at the end of the year. So, have you confirmed that your rate has reverted back to the standard 5% yet? Have you spoken with anyone from Santander about this?

    Has anyone else had any sucess with paying in significantly more than their £300 allowance in one month?

    I was hoping to deposit about £4,000 into my account but was worried about them closing it. But, if they haven't kicked up a fuss about £40,000, I shouldn't have any problems!
  • amictus
    amictus Posts: 301 Forumite
    owains wrote: »
    Has anyone else had any sucess with paying in significantly more than their £300 allowance in one month?

    Has anyone else tried this?!
  • withnell
    withnell Posts: 1,629 Forumite
    I have been looking at this. I currently bank with A+L which are part of the santander group. Would i beable to access this account within my A+L Account screen?

    You can't access the account online from within the Santander account screen! I can't remember quite the term they use - they send you statements but its not available online.
  • withnell wrote: »
    You can't access the account online from within the Santander account screen! I can't remember quite the term they use - they send you statements but its not available online.

    Just to add, that you can check your balance over the telephone.
  • amictus
    amictus Posts: 301 Forumite
    Just to add, that you can check your balance over the telephone.

    I haven't checked my balance since opening in April. Will it include any interest that year, or is that added in one payment at the end of the year? If the latter, is there actually any way to confirm interest is accumulating as expected following a large deposit?
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