Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@. Skimlinks & other affiliated links are turned on

Search
  • FIRST POST
    TheJimster
    Update! Santander 5% First Home Saver Account: Account no longer available
    • #1
    • 12th Jun 10, 2:34 PM
    Update! Santander 5% First Home Saver Account: Account no longer available 12th Jun 10 at 2:34 PM
    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    This account has been withdrawn from the market by Santander and is no longer available for new applications (existing accounts are unaffected).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=CABB EYCOM&cid=1210611105334&empr=Abbeycom&leng=en_GB&p agename=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.
    Last edited by TheJimster; 09-09-2011 at 12:18 AM.
Page 3
  • N1AK
    @ 100pcm it'd be just over 4 years before you hit the 50k limit. Guess it depends on when people want to use the cash.
    Originally posted by donkingkong
    Exactly

    Chances are you'll be able to get 5% somewhere else in 3+ years, or at least close. I don't think many people are expecting to see interest rates stay this low into the middle to the decade.
  • Essex123
    @ 100pcm it'd be just over 4 years before you hit the 50k limit. Guess it depends on when people want to use the cash.
    Originally posted by donkingkong
    In this example, you will actually hit 50k on the second anniversary/interest payment date:

    45k initial investment
    2.4k monthly payments
    1.8k interest year one (assuming 20% tax)
    1.9k interest year two (assuming 20% tax)

    Total 51.1k

    I think this strategy is good - after all, who knows what the savings market will look like in two years.

    In any event, who knows whether Santander will actually take action once the 50k limit is reached...
  • donkingkong
    In this example, you will actually hit 50k on the second anniversary/interest payment date:

    45k initial investment
    2.4k monthly payments
    1.8k interest year one (assuming 20% tax)
    1.9k interest year two (assuming 20% tax)

    Total 51.1k

    I think this strategy is good - after all, who knows what the savings market will look like in two years.

    In any event, who knows whether Santander will actually take action once the 50k limit is reached...
    Originally posted by Essex123
    Does the annual account interest definitely count towards the account balance or can you have interest paid into another account?
  • TheJimster
    TheJimster: is your account still alive and well ?
    Originally posted by housesitter
    Yes - my account is still alive and well and paying 5% at >40k. Santander's official line is they 'may' close your account if you overpay. But for once their own incompetence works agaisnt them.

    For the worriers suggesting you'll only get 0.1% - that is for the month of the overpayment only. The account terms say after that month you're back to the usual rate.

    I can't believe this loophole isn't all over the internets. 5% is as good as it gets in this climate.
  • TheJimster
    Can I ask how can you pay in 40k without the bank even noticing that? By cheque? Thanks.
    Originally posted by sveika
    You can do a BACS transfer once you have the account payment details. Then a week later go in to a Santander branch and ask for an account balance print out to confirm the money has landed safely.
  • Boseley
    That wont work....
    Hi guys,
    Just to let you know, this idea does not work, yes, after speaking to a sales rep, you could dump a huge wad of money in, however, you only actually gain money on the amount you put in each month, so 300 max, you do not gain interest on the total account balance. Therefore that money will accumulate no interest what so ever. All you will achieve is no interest on any of the money at all for that month.
  • Psychonaut
    Boseley, are you saying that nobody is earning any interest on their initial (up to) 5000-pound deposit as well?
  • owains
    Hi guys,
    Just to let you know, this idea does not work, yes, after speaking to a sales rep, you could dump a huge wad of money in, however, you only actually gain money on the amount you put in each month, so 300 max, you do not gain interest on the total account balance. Therefore that money will accumulate no interest what so ever. All you will achieve is no interest on any of the money at all for that month.
    Originally posted by Boseley
    Wow... can anyone else confirm this? I have deposited an additional 5,000 in my account, which would mean a significant loss in terms of potential interest. I'm sure someone deposited 40,000... they could be in for quite a shock!
  • rb10
    Hi guys,
    Just to let you know, this idea does not work, yes, after speaking to a sales rep, you could dump a huge wad of money in, however, you only actually gain money on the amount you put in each month, so 300 max, you do not gain interest on the total account balance. Therefore that money will accumulate no interest what so ever. All you will achieve is no interest on any of the money at all for that month.
    Originally posted by Boseley
    Rubbish, it just shows the lack of knowledge of many bank staff.

    Either:

    (1) They accept the deposit and pay you 5% on the whole balance; or
    (2) They close the account.

    From people's experiences in this thread, it looks as though they tend to do (1).
  • gsmmad
    rb10 is 100% correct......

    you get 5% on the whole balance.....
  • Irie87
    Taken from their website (can't post links yet!):

    "You will receive a lower rate of 0.10% gross/AER when you pay in under 100 or over 300 in any calendar month, but for that month only" so if you put in a large lump sum other than the initial start up amount, you will experience a 1 month drop in interest.

    "Interest is calculated on the daily balance of the account, and is paid annually on the anniversary of account opening" not just the amount you paid in.
  • Boseley
    Sorry Guys
    I spoke to 3 managers whilst being passed through different people and the end verdict is that yes you get interest on your initial deposit, but it is a one off, you deposit 5000 you get 5% on that back, for that month, after that, you only gain interest on the amount put into the account. Max of 300 a month, you do not get 5% on everything you put in there every month added with your total (so far). They confirmed this is in conditions many times over for me.

    Also when i asked what would happen if i over deposited one month, they said it would just sit in the account, and earn no interest, just like the deposit after the first month.
    Last edited by Boseley; 30-11-2010 at 12:46 PM. Reason: Addition
  • Boseley
    Proof?
    rb10 is 100% correct......

    you get 5% on the whole balance.....
    Originally posted by gsmmad
    How do you know this? Have you actually had the interest paid at the end of the year on all of it, reoccurring each month?
  • finder
    I spoke to 3 managers whilst being passed through different people and the end verdict is that yes you get interest on your initial deposit, but it is a one off, you deposit 5000 you get 5% on that back, for that month, after that, you only gain interest on the amount put into the account. Max of 300 a month, you do not get 5% on everything you put in there every month added with your total (so far). They confirmed this is in conditions many times over for me.

    Also when i asked what would happen if i over deposited one month, they said it would just sit in the account, and earn no interest, just like the deposit after the first month.
    Originally posted by Boseley
    Boosely, I am sorry to disagree with you on this as well, but you are assuming 'your chat with a bank manager' as being equivalent to the written terms and conditions of the account. Obviously, that is miles, miles away from reality. Summary of the terms and conditions here; if you skim through them you won't be able to verify those 3 managers' account of the T&C's (assuming that they have even read the terms and conditions themselves!)

    You are given a couple of pages of terms and conditions when you open the account. The additional piece of information to that on the webpage is that they say that they 'reserve their right to close your account if you overpay'. Obviously, if they don't and as previous posters have rightly stated, they will pay 0.10% for the month when you overpay, but will have to pay 5% thereafter as per their own terms and conditions. I can only picture very, very creative minds to come up with a different interpretation of what it's written!

    So, I would suggest that next time you talk to one of those 'knowledgeable managers' you ask them to please print out a copy of the T&C's and pinpoint you to the exact line that backs up their claims! That will be the end of the discussion.

    Regards
    Last edited by finder; 30-11-2010 at 3:08 PM.
  • Boseley
    ....
    Boosely, I am sorry to disagree with you on this as well, but you are assuming 'your chat with a bank manager' as being equivalent to the written terms and conditions of the account. Obviously, that is miles, miles away from reality. Summary of the terms and conditions here; if you skim through them you won't be able to verify those 3 managers' account of the T&C's (assuming that they have even read the terms and conditions themselves!)

    You are given a couple of pages of terms and conditions when you open the account. The additional piece of information to that on the webpage is that they say that they 'reserve their right to close your account if you overpay'. Obviously, if they don't and as previous posters have rightly stated, they will pay 0.10% for the month when you overpay, but will have to pay 5% thereafter as per their own terms and conditions. I can only picture very, very creative minds to come up with a different interpretation of what it's written!

    So, I would suggest that next time you talk to one of those 'knowledgeable managers' you ask them to please print out a copy of the T&C's and pinpoint you to the exact line that backs up their claims! That will be the end of the discussion.

    Regards
    Originally posted by finder
    As much as i would love to agree with you there, not one single person in this thread has proven otherwise, nor has any Santander employee stated that these assumptions are correct. If you have studied the T&Cs then where in the T&Cs does it actually state that you will receive 5% on the whole account balance, the answer - It Doesn't. All it states is 5% on payment, nothing about whole balances. You do not have a case with them if they do not pay it any you say "It does not say in the T&Cs that you won't get it on the whole balance." Because they will simply say "Where does it state in the T&Cs that you do?".

    Unless you can get someone who actually opens the account and created it etc to say that you are correct, as someone has done above, you may put in 40,000 for a whole year and then receive absolutely no interest, big risk for something that you can not prove and you will never know till you close the account......

    Kind Regards,
    Boseley

  • Ibliss
    From the Santander website:

    First Home Saver (Special Issue 1) rates below are variable

    Tier - 100 - 50,000 | Gross p.a./AER - 5.00%

    ..and...

    "Interest is calculated on the daily balance of the account, and is paid annually on the anniversary of account opening. For example, if you saved 100 per month for 12 months, you will get back your deposits totaling 1,200 (12 x 100), and will have received in total approximately 32.50 gross interest during the year (provided no withdrawals are made during the year)."

    So they have said that you get 5% on balances between 100 and 50K and this interest calculation is based on the daily balance. Seems fairly clear to me.
  • Boseley
    Confused
    From the Santander website:

    First Home Saver (Special Issue 1) rates below are variable

    Tier - 100 - 50,000 | Gross p.a./AER - 5.00%

    ..and...

    "Interest is calculated on the daily balance of the account, and is paid annually on the anniversary of account opening. For example, if you saved 100 per month for 12 months, you will get back your deposits totaling 1,200 (12 x 100), and will have received in total approximately 32.50 gross interest during the year (provided no withdrawals are made during the year)."

    So they have said that you get 5% on balances between 100 and 50K and this interest calculation is based on the daily balance. Seems fairly clear to me.
    Originally posted by Ibliss
    :O I retract what i said! I did not see that bit in the documents they sent me by post but i can see it on the website! Even though it contradicts everything the people on the phone said i apologise that seems a lot clearer.

    One question though, how can 32.50 be the interest from 1200? 5% works out at 60. 5 a month?

    I hope this is all correct and that you can do this, because it is a lot to risk!
  • Ibliss
    Hi,

    It's 5 when you have 1200 in the account, but this is only for the final month. In your first month you would get 5% on 100, then 5% on 200 in the second month etc. I would look like this:


    month 1 100 - 0.42
    month 2 200 - 0.83
    month 3 300 - 1.25
    month 4 400 - 1.67
    month 5 500 - 2.08
    month 6 600 - 2.50
    month 7 700 - 2.92
    month 8 800 - 3.33
    month 9 900 - 3.75
    month 10 1000 - 4.17
    month 11 1100 - 4.58
    month 12 1200 - 5.00

    Total - 32.50 (gross)
  • donkingkong
    Does the annual account interest definitely count towards the account balance or can you have interest paid into another account?
    Originally posted by donkingkong
    To answer my own question, interest is paid into the account and would therefore count towards the account balance (a max. of 50k).
  • intalex
    This works. I opened a first home saver in March 2009 and deposited 45k in the first month. Each month after I deposited 100. In March 2010 i got 5% interest on the full balance for 11 months. The lower rate of interest only applied to the month in which I overpaid.
    Originally posted by preston87
    Here we go with a definite answer! Are there any more people who have had the account for over a year and over-funded it initially - did you receive 5% interest on all months apart from the month of over-funding?
Welcome to our new Forum!

Our aim's to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

5,062Posts Today

4,906Users online

Martin's Twitter
  • RT @MoneySavingExp: Hi folks - the site will be down from 10pm tonight until 8am tomorrow while we re-charge the batteries with some behind?

  • Uk dominating world long jump.Who'd have thought it. Kathy Cook's British 200m record about to go I think. #Beijing2015

  • RT @MoneySavingExp: If you're affected by the #HSBC payments glitch, here's what you need to do (more to follow, when we get it): http://t.?

  • Follow Martin