Quick advice please on regular savings accounts

villafan10

My mom was looking to set up an £80 a month regular savings account to pay off her free overdraft when it started to become a paid overdraft in 12 months time. Basically, I looked on MSE and saw that Barclays offered the best rate so went in to a branch around a week ago and set one up. My mom hasn't had anything back from the bank yet to say it's been set up (although it's only a matter of time). However in the mean time, I have noticed that a 12% regular saver is available through Alliance and Leicester if you have the Premier Current Account. My mom has just switched to that account as she is always in her overdraft (and you get free overdraft for 12 months) and you get £125 for switching when invited by someone else.

Basically my question is, obviously, am I within my rights to just not fund the Barclays account as no money has gone in yet and just leave it to rot and instead deposit the money in the Alliance and Leicester account? I know you get penalties for withdrawal but there's nothing stopping you from just not putting money in in the first place is there? I think I know the answer, just want to make 100% clear because I'm new to moneysaving and don't want to get stung.. Many thanks.

LongTermLurker

I think you can only take up the offer of the 12% savings account when you open your first A&L current account - in other words, as she already has a current account, I don't think she can apply for an A&L RS account any more. When you apply for the Premier account you are asked if you also want to open a RS account alongside it.

Re the Barclays account, if you don't fund it, it'll either lapse and be closed, or just stay open waiting for your first deposit - I suspect the former.

villafan10

LongTermLurker wrote: »

I think you can only take up the offer of the 12% savings account when you open your first A&L current account - in other words, as she already has a current account, I don't think she can apply for an A&L RS account any more. When you apply for the Premier account you are asked if you also want to open a RS account alongside it.

Re the Barclays account, if you don't fund it, it'll either lapse and be closed, or just stay open waiting for your first deposit - I suspect the former.

Yep, granted it says..
Simply apply for a Premier Regular Saver at the same time as you switch to a Premier Current Account at your local branch.

But directly after that it also says..
Already got a Premier Current Account? You can still benefit from a Regular Saver paying 12.00% gross p.a./AER whilst protecting your family with Save & Protect

You've answered the question I really wanted answering anyway so cheers :j

YorkshireBoy

£80 a month into a 12% regular saver will make £62.40 gross (£49.92 net of basic rate tax).

£80 a month into a 7.75% regular saver will make £40.30 gross (32.24 net of basic rate tax).

The difference is £17.68 for the year.

What's the cost of the "protect" product(s)?

Does she *need* the "protect" product(s) element of the deal?

If she does *need* them, are they cheaper elsewhere?

Always read the small print.

villafan10

Yeah from what i can tell, if you go for it when you set up the current account its fine, but if you do it afterwards you need to take out that Save and Protect which is £6 a month so obviously not worth it. I'm going to try ringing them tomorrow (just tried but all their systems are down) and see if they're willing to do it without the Save and Protect because my mom really doesn't want/need it. Plus if she is only putting £80 a month into it, I can top it up the other £170

LongTermLurker

villafan10 wrote: »

But directly after that it also says..
Already got a Premier Current Account? You can still benefit from a Regular Saver paying 12.00% gross p.a./AER whilst protecting your family with Save & Protect

You've answered the question I really wanted answering anyway so cheers :j

Save & Protect will mean she would have to take out an (un-necessary?) insurance policy as well - is the cost of that worth it?

edit - sorry, just seen YB's comments and your follow up - I'm jumping the gun again!

villafan10

LongTermLurker wrote: »

Save & Protect will mean she would have to take out an (un-necessary?) insurance policy as well - is the cost of that worth it?

edit - sorry, just seen YB's comments and your follow up - I'm jumping the gun again!

No worries, I'm just glad you're interested enough to help. I'll let you know the outcome when I've phoned, see if they'll allow it or not because let's be honest, if they do, a 12% regular saver is WELL worth having.