Bradford and Bingley offer 10% interest on your savings.

MSE_Martin

Bradford and Bingley offer 10% interest on your savings.
Bradford and Bingley have launched a new account with a high headline rate of 10%. It’s available in branches only, and is withdrawn on Saturday – apparently due to high demand.

It’s a Regular Savings account, meaning you have to make a deposit each month. The money will be locked in until December, when the account will be closed, and the money returned to you with added interest. However, the big drawback here is that you can only deposit a maximum of £150 per month – quite a small amount, especially considering the best way to use these accounts is to drip feed from savings you already have (thus earning interest on all of the money, all of the time – see Regular Savings Accounts article for the full method).

The restriction of a maximum input of £1500 really shackles the amount of interest you can earn. For example, the top paying ISA (see Mini Cash ISA article) will pay you £64, tax free, over the 10 months to December, whereas this B&B offering will only return £54 after tax. It also only beats the best Instant Access account (see article) by a couple of quid, and is considerably more hassle.

So, if you've already filled up your £3000 ISA allowance for the year, and you are prepared to drip feed money from another high-paying account then this account may be worth it, in order to squeeze the last few pounds out of your savings.

young_pensioner

Martin
I was in Barclays today (sorting out my £100 incentive current a/c) and I was told that on the 16th they are launching a new Regular Saver Account at 10% interest. The Personal Banker thought that the maximum per month would be £250. But I expect all will become clear after the 16th.

soba

Hey young pensioner, how did you get a £100 incentive to open an account? Did I miss something?

redagila

Thanks for this one Martin. As a non tax paying pensioner, every little helps. Went into B&B this afternoon, lovely girl even filled in all the necessary forms- absolutely no hassle.
One point though I was asked for details of when various insurances were due and she gave me a very low key pitch on Travel Insurance but I suspect that was because her supervisor was around!
:rotfl:

schiff

I don't entirely agree with Martin that the benefits of this B&B account are so marginal. I'm going to do it!

A monthly transfer from, say, an Alliance & Leicester Premium current account (which pays net interest after tax @ 4%) to the B&B account (which pays 8% net interest after tax) brings (by my rough calculations) about £27 in additional interest over the period to next December.

Banks etc spend an absolute fortune advertising Cash ISAs each year and the annual benefit to a basic rate taxpayer is about £30 if you use 5% as a benchmark for a Cash ISA interest rate (£3000 @ 5% = £150 : tax saved £150 @ 20% = £30).

Hardly worth going ecstatic about is it? And we now have the chance to earn (in addition to the interest on our Cash ISA) a similar sum with an ordinary everyday Regular Saver! And more than that if the news of the Barclays offering turns out to be true.

young_pensioner

Hi Soba
The Barclays £100 incentive was in Martin's Email Tips on 18th January. There is a thread running in the Budgeting & Current Accounts forum. It was a very brief window of oportunity because Barclays closed it very quickly... probably due to high demand after Martin's email.

Hywel_2

I opened up one these "Christmas Saver" accounts yesterday lunchtime at my local Bradford & Bingley. The lady said that the new account was very popular and was 2/3 full. She also mentioned that it had been featured on working lunch and they were expecting more people in. So if you are interested, open up and account soon (besides which as Martin mentions above it gets withdrawn on Saturday). £54 (if you pay the max in) may not seem like a great deal but at least it gets you in the habbit of regular saving.

cheggers

I opened one up today, the bloke that served me said the account will closed by mid week as it's too popular and it costs B&B about £50 to open up a new account. So it will be a loss maker.

Mind you they now have all my contact details so I am sure they will be bombarding me with direct mail and phone calls in the future to sell me some other products.

AP

cheggers wrote:

I opened one up today, the bloke that served me said the account will closed by mid week as it's too popular and it costs B&B about £50 to open up a new account. So it will be a loss maker.

Mind you they now have all my contact details so I am sure they will be bombarding me with direct mail and phone calls in the future to sell me some other products.

I opened one this morning and the 'Sales Associate' who did it for me asked me details of every single financial product that I have. However, I managed to show her that whatever I've got are better than what they can offer at Bradford and Bingley.

When she mentioned the 50/50 FTSE Bond, I said that I needed my money to buy a new car!

Shiggaddi

I opened my account on Monday, and luckily enough I was doing some mystery shopping in town, so was able to pop in to B&B on the same trip.

I also had the some spiel from the staff wanting to know my insurance renewal dates, so gave them my car insurance details. On the subject of house insurance, as I live with my parents, they then wanted to get my name on file, for when I move out and want a mortgage.

As the account is probably closed now, and was only openable by visit to the branch, then people should consider the cost of travelling into town, if having to make a special trip. If I wasn't doing the mystery shopping that paid for my trip into town, then I'd have to think about the cost of the petrol, car parking etc, and how much extra interest I'd make on £150 in the first month, £300 in the 2nd month etc compared to my A&L savings account paying 5.15%

When I was there, I was told that the monthly amount can be funded by BACS transfer, Standing Order, or by going into the branch and paying in via cheque or cash.

Since the interest for 3 days (time to transfer on BACS/SO) on £150 is so small (probably less than 10p) it's easier to go online and arrange a transfer every month, unless of course I'm visiting town in the first week of a month.

suziewuzie

Is this account difinitely closed now? Anyone tried today? I was in town on Sat & tried to open one, but of course did not have all the acceptable id. Got to go into town today, so just wondering if it's worth another try.