A&L eSaver - Issue 1 (6.50%) vs Issue 2 (6.60%)

fluffypop

Hello,

Back at the start of September I opened Issue 1 of A&L's eSaver as it was offering one of the best rates around at the time (6.50%) despite the withdrawal penalties (which I wasn't too concerned about as I don't plan to withdraw from it).

Subsequently A&L have released Issue 2 of their eSaver which offers a slightly higher rate - 6.60%.

The naive fool that I am I stupidly imagined that my eSaver would be upgraded to the 2nd issue but this is not the case and the 2nd issue is only available to customers applying after a certain date.

Couple of things I wanted to check with peeps here:

1) Is it standard practice for banks/building societies to reserve rate increases like this for new customers? I can't help feeling it's a rather shoddy practice. The rate increase is of course minimal but it's the principal.

2) What would stop me closing my Issue 1 eSaver and opening a new Issue 2 to get the higher rate?

Any input from money experts gratefully received

oldfella

I rang them today and got them to shift our accounts from Issue 1 to 2. Just ask them nicely. I had no problem, but if they do say no - suggest you say politley "I dont want to be difficult - but would you prefer I moved it to Ing"

The_Fiddler_2

I asked the same question a couple of days ago. So there are no pitfalls then? Can 1 and 2 run at the same time?

oldfella

open issue 2 first - wait for it to appear online, then ring them and ask them to move the money. It might be better to wait until the 1st of the month to do it. 1 and 2 can be run together - dont see the point though.

The_Fiddler_2

I have issue one, so obviously thinking of moving to issue two with higher rate.

The point of running both together is that if you need to take money out for any reason, yes the 1st of the month is obviously best, but since you then won't get any interest on the rest of the money if you move it to issue one for the rest of the month you will get interest at a fractionally lower rate and then move it back on the next 1st of the month (that's why I still have a Direct Saver sitting with £1 at the moment, although I have never tested the theory)

oldfella

not sure that works - the linked account has to be capable of effecting Direct Debits

Pendle_Gazza

Seems like too much of a hassle for the sake of 0.1%, surely? It works out at less than three quid a month even if you're lucky enough to have the safe max of £35K.

Bisoy

This is a very interesting topic which I've never thought about closely. My wife and I do have a joint current accounts with A/L. I've got an esaver issue 1 but has since move bulk or our savings to KE. I've just realised that my wife could open the esaver issue 2 and move back our savings from KE to our current account then to her esaver account.

Now my cunning plan is ( now peeps tell me if it's legal but I could not see anything on their T&C ) if we need to take money out which we always do on 1st of the month, move the rest to my esaver issue 1 thereby still earning interest at the end of the month. Do you think this will work?

The_Fiddler_2

oldfella wrote: »

not sure that works - the linked account has to be capable of effecting Direct Debits

You don't need DD for A&L accounts, but yes I would move it via my linked A&L current account.

The_Fiddler_2

Pendle_Gazza wrote: »

Seems like too much of a hassle for the sake of 0.1%, surely? It works out at less than three quid a month even if you're lucky enough to have the safe max of £35K.

Worth the hassle if you need to take money out for any reason.

oldfella

You don't need DD for A&L accounts, but yes I would move it via my linked A&L current account.

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to clarify this - following comes from the A&L user guide - the implication is you cant use a savings account as the linked account

Does my nominated current account have to be held with Alliance & Leicester?
No. An eSaver can be linked to any current account, either one with Alliance & Leicester or one held at another bank or building society.