Internet Saving account, interest re-invested..

mr_xyz_2

Hi All, thought I might be able to tap into some expertise on this site!! Recentlly opened a Birmingham Midshires internet accout, which is linked to my current account. Interest is calculated monthly but they insist on paying it to my current account. they even state that it cannot be re-inserted to savings account. Is this standard proceedure on all these type accounts. I was hoping to allow the interest to accumilate and watch it grow. Does anybody know of a good saving rate account that does it the NORMAL way?? Thanks

spike87

I recommend Icesave:

http://www.icesave.co.uk

Good interest rate and the interest gets paid into your Icesave account either monthly or yearly. (You set it up when you create an account).

I have an account with them and can't fault it!

Limes

mr_xyz wrote: »

Recentlly opened a Birmingham Midshires internet accout, which is linked to my current account. Interest is calculated monthly but they insist on paying it to my current account. they even state that it cannot be re-inserted to savings account. Is this standard proceedure on all these type accounts. I was hoping to allow the interest to accumilate and watch it grow. Does anybody know of a good saving rate account that does it the NORMAL way?? Thanks

Sounds like the Birmingham Midshires e_Saver Issue 2 to me. A deceptive account that looks highly attractive in terms of its advertised Annual Equivalent Rate (AER) but one that can never be achieved because of the fact that they scrape the interest off and pay it elsewhere, meaning that you'd only ever get 6.33% before tax on that account because there's nothing to compound.

Of course part of the difference is then made up by the rate on whatever account the interest is being paid into but will never equal the 6.52% advertised because frankly if you have another account that pays higher elsewhere, then why wouldn't you have taken advantage of it in the first place?

In my opinion the top ten accounts in terms of rate are currently as outlined below (this is irrespective of the fact that some of these accounts paying around the same rate currently include a 12-month introductory bonus or are only available based on a limited number of withdrawals, etc.):

A&L eSaver (6.56%AER)
Kaupthing Edge Instant Access (6.55%)
Bradford & Bingley Internet Saver Issue 3 (6.51%)
Heritable Bank Online Saver Issue 1 (6.51%)
Manchester Building Society Premier Bonus Issue 3 (6.51%)
Abbey eSaver Direct (6.50%)
Capital One Savings Bonus Saver Account Issue 3 (6.50%)
ING Direct Savings Account (6.50%)
AA Internet Saver Issue 1 (6.46%)
West Bromwich Building Society Stratus No Notice Account (6.45%)

I'm pretty sure that these all allow you to compound interest in the account itself but you will obviously need to check. Hope this helps narrow the search a little.