e-savings?

air_2

I would like to ask you about Internet banking and those e-savings account.
I have never used before internet banking but the accounts are with higher interest compare with the normal saving account

why is so? how they work? is it worth to put a lump sum in there please?

opinions4u

air wrote: »

I would like to ask you about Internet banking and those e-savings account.
I have never used before internet banking but the accounts are with higher interest compare with the normal saving account

why is so? how they work? is it worth to put a lump sum in there please?

The accounts are usually higher rate because:
1) They are used to attract new customers to a provider
2) They are lower cost to operate than branch or telephone accounts

Point (1) is actually the main driver. Banks tend to have very profitable books of savings accounts that have been there for years. These will often pay rates between 0.1% and 4% and they don't really want to move these guys in to accounts that pay 6%+. That said, they do want to attract business from competitors and can only do this with eye catching rates.

Once they have enough customers in the new internet only account, the rates then begin to drop again. ING and the Halifax Web Saver were both market leaders at one stage but now have either mediocre rates or introductory offers only available to new customers.

While the better instant access account are online, don't assume that they always will be. Keep your eyes open for bigger and better deals and be prepared to chase rate with different providers to get the best from your savings.

DocProc

At the present time, if you have a current account with say, Lloyds TSB, and want to transfer funds out of it to another account:

A. Use 'Phonebank' and it takes a couple of hours to transact.
B. Use Lloyds TSB's online 'Transfers and Payments' facility and it takes three to four days to transact.

'A' above is enabled for Faster Payments.
'B' above is NOT enabled for Faster Payments

This is, to some extent, where they are getting their extra profits from so as to be able to pay out a slightly higher interest to an online saver.

lilac_lady

Esavings is handy because you can get access to your money quickly. It can be use to "feed" another account or kept as savings.

air_2

ok,i saw that Natwest good e-savings account at the moment.

do you think that the rates are fixed for 12 monthe or variable on the e-savings accounts,please?

Baldur

air wrote: »

ok,i saw that Natwest good e-savings account at the moment.

do you think that the rates are fixed for 12 monthe or variable on the e-savings accounts,please?

The words "6.50% AER (variable)" on the product description should give you a clue......

jules73_2

The rate maybe variable, but the bonus is 2.09% on top of the standard rate, so it's a good account.
Be prepared to get your money elsewhere in 12 months time though.