Instant Access Savings Article Discussion Area

murphydavid

zzzLazyDaisy wrote:

Don't over look the Coventry BS combined current account / saver at 5.1% (incs bonus for first year)

Still seems to be the best if you can remember to withdraw £1000 and put it back again each month. But with house prices still going up I would buy that next house very soon before you lose your place on the property ladder.
If you go to ICICI then don't put it all in at once their admin is still far to dodgy for me. To cut a long story short they are still sending me interest on a non existant account part of which has gone to the tax man evidently. I told them the correct situation so many times I have just given up.

leeds6lad

Hi there, can someone help me with the following. Consider putting £1000 in a savings account offering an AER of 5%. This means that after 1 year, I would have £1050. If I made a withdrawal of say £900 in month 11, in a monthly interest account, I would get interest every month and even interest on the previous month's interest (compound interest). of course, the actual amount i would recieve in month 11/12 would be less because i've withdrawn money. Okay, to the question then: If I was to do the same with an annual paying instant access savings account and I withdrew £900 in month 11, does that mean because it gives me interest on an annual basis it would only award, after 1 whole year, only 5% on the £100 remaining. How does it work? I apologise in advance if this is a daft question.

Thanks

Ram

grumbler

Even if interest is paid annually, it is calculated daily (at the end of the year on a daily basis).

Lowtrawler

The article should consider what "instant access" actually means. In the case of on-line accounts with no high street presence, you are usually limited to getting a BACS transfer into your linked account which can take up to 5 days. Some of the on-line accounts offer CHAPS transfers (true instant access) but others don't. Some accounts have a limit on how much you can withdraw on a given day (with ICICI it is £40k), others have no limit.

In my opinion - to be truly instant access, you must be able to withdraw and use any value of funds on the same day that you decide you need them. This is not the case with ICICI and is probably not the case with many other, so called, instant access accounts. I think it is important that the article be amended to reflect these points.

murphydavid

leeds6lad wrote:

Hi there, can someone help me with the following. Consider putting £1000 in a savings account offering an AER of 5%. This means that after 1 year, I would have £1050. If I made a withdrawal of say £900 in month 11, in a monthly interest account, I would get interest every month and even interest on the previous month's interest (compound interest). of course, the actual amount i would recieve in month 11/12 would be less because i've withdrawn money. Okay, to the question then: If I was to do the same with an annual paying instant access savings account and I withdrew £900 in month 11, does that mean because it gives me interest on an annual basis it would only award, after 1 whole year, only 5% on the £100 remaining. How does it work? I apologise in advance if this is a daft question.

Thanks

Ram

The interest you get on all accounts can be calculated from
A2*(1+(((1+B2/100))^(1/365))-1)^C2

Where A2 is the capital invested
B2 is the AER
and C2 is the number of days it is invested for.

So if you put in £100 at AER of 5% for 365 days then

100*(1+(((1+5/100))^(1/365))-1)^365 = £105.00

(the formula is what you would put in in cell D2 in an excell sheet with A2 to C2 being as above)

Hope this is of use.

redagila

Re Coventry BS 60 Plus a/c
I had the Issue 1 of this account with a 1.25% bonus which rate ended yesterday. Phoned them and was able to open new Issue 2 a/c but only by closing previous one. Very simple, Mark did it very efficiently whilst I was on the phone. £2K transferred immediately to the new a/c and balance coming back to my nominated bank a/c.
Worth the phone call.

Apreciar

All of this switching accounts is fine, however, my concern is that during the process of switching the money is not earning interest. For example, I am invested with ING (a substantial amount), if I transfer into my bank account to enable me to switch to say Brad & Bing how would I be able to minimise the days of lost interest. This may be old hat to you seasoned switchers but gives me a headache.

Lowtrawler

Beldray, you need to ask for CHAPS transfers.

These are same day transfers and if you are lucky you may be able to get the funds out of one account and into your new account on the same day (via your linked account).

Essentially, you should ask for a CHAPS transfer which is a same day transfer. You will usually be charged £20 for a CHAPS transfer. This guarantees that the amount will be in your nominated account by 3.00pm on that same day (you usually have to request before 11.00am). Generally, you will see the amount well before 3.00pm and you can then request another CHAPS transfer to your new account. If your bank is on the ball, even though you have asked after 11.00am, it should still happen the same day. Total cost is 2 x £20 = £40. No loss of interest. Worst case, the transfer out takes place the next day and you lose 1 days interest.

Some institutions do not officially offer CHAPS but all are capable of performing CHAPS. Hence, you may need to phone and make arrangements both in and out in advance of starting the ball rolling. Don't take no for an answer - they can all do it even if they don't want to.

Apreciar

Thanks,
Great help, allthough it will only work into B&B, ING do not do CHAPS. Still if half the loss is minimised it's got to be good.

murphydavid

Take care because if you are going to pay a set fee of £20.00 for an instant transfer (CHAPS) you need to be transfering at least £37,400 in one go. 4 days interest on £37,400 at 5% = £20.00. And you need to be transfering more than this if you pay tax on your interest or the rate you get is less than 5% to make a £20.00 fee worth while.