Alliance & Leicester reg savings 10%, what do you think of this plan?

tomstickland

Background info. After years of owing money I've sorted my finances and started saving.

I've got £3K in a mini cash ISA with first direct.
around £1.6K in a 5% instant access savings account.

I've just opened a Lloyds TSB premier <whatever it's called> internet account that pays 5% on credit. My salary of just under £2K is payed into there each month.

Now I've just found out about the Alliance and Leciester regular savings account that is paying 10%. I want to feed in the maximum of £250 to this acccount each month.

To do this I need to open an A&L Premier Direct Current Acount. I need to pay in at least £500 per month for this account to be allowed.

Can I....
-set up a standing order to pay £500 from my Lloyds TSB main account into the A&L current account so that I then meet the requirements of the account
-then pay £250 per month into the savings account also via a standing order
-then manually move the £250 back into my Lloyds TSB account, or set up another DD to move it back
?


I don't want to move to their current account for real use.

_________________________________________________________________
I've just done the maths on this in a spreadsheet.

If I started with £3K, then in a 5% PA account that'd make me £150 over the year, ignoring tax.

If I paid £250 of that per month into the 10% account then I'd make just under £230 over the year, an effective rate of 7.6% PA, tax free.

So I'd gain £80 for my effort, tax ignored. Take away tax at 20% and I've made £63 more than if I just left the money in a 5% account.

Is that worth it?

tomstickland

More info

Premier Regular Saver with an interest rate of 10.00% gross p.a./ AER is available to customers only at the time of opening a new Premier or Premier Direct Current Account. To be eligible for Premier Regular Saver at a rate of 10.00% gross p.a./AER: applicants must not currently hold any A&L current account, and; applicants must not have held any A&L current account in the three months preceding a new Premier / Premier Direct account application. Minimum monthly payment £10, maximum monthly payment £250, for a maximum of 12 months. Interest is paid on maturity on the anniversary of the first payment due date. AER stands for Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded each year. Gross is the interest paid before tax. After 12 months the account will be closed and funds transferred to your Premier / Premier Direct Current Account.

All looks good to me.

Actually, leaving the money in the current account would be no bad thing, since it pays 5% on balances up to £2.5K, no worse than my Lloyds/TSB account.

Premier Direct Current Account

---

An award winning current account, with a market leading interest rate, no monthly fee and the added convenience of Internet Banking to manage your account online whenever it suits you


If you are 21 or over, can pay in at least £500 per month and use Internet Banking regularly you could be better off with:

5.00% AER (fixed until 31.12.06)1 on balances up to £2,500

mary

Haven't checked your maths, but every £63 extra you can earn, is yours not theirs. Similarly, I have a Lloyds TSB account, don't want to switch (loyalty and all that after 50 years, but always keep just the minimum in to cover regular savers etc., so will open a Premier Direct in order to fulfil the commitment of £500 per month in and then pass on to the Regular 10% saver with them, and then I will put the remaining £250 on to the Halifax regular saver. As you say, you can earn 5% with them on the current account anyway.

Can't see a problem with what you're planning. I'll be doing the same

isasmurf

mary wrote:

Similarly, I have a Lloyds TSB account, don't want to switch (loyalty and all that after 50 years

Don't let Martin see this, he'll burst a blood vessel!!!! :rotfl:

mary

isasmurf wrote:

Don't let Martin see this, he'll burst a blood vessel!!!! :rotfl:

Yes I know!!!
I did once apply for a Create card with Lloyds and was miffed after 50 years with them. Took it personally, as you do. About 2 months later got a courtesy call from them, asking if I was happy with their services etc., complained about not getting the Create Card, the supervisor checked my account activity, decided I was a model customer, couldn't see any problem as to why I was turned down, and within a week I got a £15K Platinum Credit card from them, which bearing in mind my income is around £12K, I was more than happy! So, you sometimes just have to be patient and turn situations on their head and then milk it properly!!!

exel1966

mary wrote:

Similarly, I have a Lloyds TSB account, don't want to switch (loyalty and all that after 50 years, but always keep just the minimum in to cover regular savers etc.,

Quote:
Originally Posted by isasmurf
Don't let Martin see this, he'll burst a blood vessel!!!!

I've had a LLoyds Gold current account for 22 years which pays no interest ( loyalty and all that) but now use it to my advantage. I've just opened an A&L Premier Direct and will transfer my salary from Lloyds each month to A&L to get the 5% interest. However, I'm retaining the Lloyds account as well to get the free benefits (AA Cover, Sentinel Cover, Mobile Insurance, Travel Insurance etc). For that I have to keep a minimum balance of £2000 in the account (to avoid monthly fee of £8) but that's not a problem as the free benefits outweigh what I could earn on interest by moving the min balance to a savings account taking into account the 40% the tax man would receive.

Back to the original Q though - Plan looks perfectly OK to me. I'm P****d off because I'm not entitled to open the 10% savings account as I opened my A&L Premier 4 weeks ago !!! :mad:

North-East_Quine

Can someone explain - if I open a Premier Direct Account paying in £500, will the £250 that I then intend putting into a 10% Premier Regular Savings Account come from my Premier Direct Account, or is this an additional payment over and above the £500 requirement, ie do I have to pay £750 in total per month to Alliance & Leicester Accounts or just £500? Sorry for being so 'thick'!

mary

£500 per month only

tomstickland

One thing though, I don't see what I can't pay, say, £1K into Lloyds TSB and then transfer that on to the A&L account each month. This meets the requirements of both accounts. But Martin says in his "top current accounts" page that you'd need to be receiving £2K per month to run both accounts.{Also, A&L will run on £500 per month, not £1K).

isasmurf

This thread has been littered with referrals. Can I remind all members that Martin has asked that there should be no referrals on any board except the Referral Board. This includes

• posting directly
• linking to a post on the referral board
• posting "see thread on the referral board"
• asking for PMs
• requesting for somebody with a referral

Any such posts will be either moved to the referral board, referred to abuse or deleted.

monki_man

Hi guys,

so in a nutshell,I can transfer £500 from my HSBC into my premier current a/c, £250 of this goes to the reg saver and the other £250 can go into my online saver a/c. Is it as simple as that?