First Direct E Savings Account

wellsj

One of first direct's conditions for this account is that if you make a withdrawal in a month, then you forfeit the total interest payable on the total amount for that month. The interest is credited to my current first direct a/c on the 1st of each month. Interest accrues daily and is paid monthly.
My question is, if I withdraw the total amount held in e savings onthe 2nd, reserve the amount I need and deposit the remainder back into e savings immediately, can a penalty be levied? I can't find the answer in terms and conditions.
Has anybody tried this?

Milarky

No it doesn't work like that: you are right that you should withdraw the whole balance [bar £1] and transfer the rest to another high interest rate account since ANY balance during the month of witdrawal earns zero interest.

I have suggested that a couple could each hold one e saver account in their own name but link these both to the same first direct current account - a joint account (as far as I know, that is within the rules of the game) - so that one withdrawal per month (always on the first) can be made from one or the other e saver account. The (unused) balance plus anything paid in during the month would then transfer to the second account whilst the first passed the month inactive. Then the following month this could be turned around with the original account serving as the 'reserve' (as you put it) and the second account as for the withdrawal required. Complicated it is - and inflexible - requiring discipline and organisation. Why anybody would hold a FD e saver given their atitude on this I don't really know - unless they really like being a bank customer maybe.

[By the end of 2007, as I keep saying, 'same-day' interbank transfers will have arrived. This will sweep away the distinction between 'in-house' and 'external' accounts. So you could keep your current account with FD, say, but leave your savings with someone else, knowing that you could move your cash between them almost as easily as you can only do at present if the accounts are all in the same place]

Horasio

I was wondering that too

What about non First Direct accounts?

Is it better to take money out on the first or last day of the month?

When does their month begin and end?

innovate

Why not just go for an account that pays the same or more and doesn't have such a punitive clause?