Sainsbury's saver

dilEmma

Hi all,

Any news back from Sainsbury's Bank about whether withdrawal of cash in the first year will affect the interest for the whole year (e.g. it's backdated). I was reading about the rate dropping to 1.25% if you make a withdrawal but just wanted to claify on the backdating part.

Thank you!

withnell

What account do you have?

rb10

I assume you are talking about the Internet Saver, which has a variable rate of 3%, which is guaranteed to be above the BOE base rate for 12 months, if you don't make any withdrawals and keep at least £5000 in the account.

According to their website, you will get the higher rate until you make the withdrawal, and then from that date onwards will get the lower rate.

If you are familiar with Halifax's Guaranteed Saver Rewards, it works in much the same way as those. It is a very fair way of doing it.

Here is the relevant text from their website:

If you withdraw from your account during the 12 month period, you will then only receive our standard Internet Saver rate from that date.

apt

Assuming there is nothing in the ToC to stop you opening multiple accounts if you were going to put a large sum into the Sainsbury's Internet Saver it would make sense to open more than one account. Then if you had to make a withdrawal you could run down one account and top up one still earning the bonus. Re backdating it's only accounts opened between 27 February and 17 March that qualify for the bonus.

rb10

apt wrote: »

Assuming there is nothing in the ToC to stop you opening multiple accounts if you were going to put a large sum into the Sainsbury's Internet Saver it would make sense to open more than one account. Then if you had to make a withdrawal you could run down one account and top up one still earning the bonus.

The T&Cs say

2.6 We may limit the number of Internet Saver accounts you can have. We will tell you when you cannot open any more accounts and explain what options are available. We reserve the right to change this amount at any time.

So basically they aren't giving anything away, but I wouldn't be surprised if they limited the special offer one to one per customer, as they are part of HBOS, and HBOS impose this condition on their similar accounts.

Investor44

rb10 wrote: »

I assume you are talking about the Internet Saver, which has a variable rate of 3%, which is guaranteed to be above the BOE base rate for 12 months, if you don't make any withdrawals and keep at least £5000 in the account.

The thing I don't understand is why existing savers have to open another account to benefit from this - why can't they just deposit £5000 into their existing account to get the new rate?
Surely it would be easier on the administration rather than loads of new accounts being opened.

rb10

Investor44 wrote: »

The thing I don't understand is why existing savers have to open another account to benefit from this - why can't they just deposit £5000 into their existing account to get the new rate?
Surely it would be easier on the administration rather than loads of new accounts being opened.

But that would be costlier on their wallets, as they are hoping you will put £5k+ in your existing account that they can then pay you the lower rate on.

janusdesign

I had a five figure sum in my Sainsburys Internet Saver account (getting 1.25%) when I got Martin's email about the 3% offer... though its 2% above base, so guess it may drop to 2.5% soon...

anyway, I opened a new internet saver account (my second), transferred £5k from my original internet saver account (transfer occurred instantly and account was setup straightaway)... the interest rate was "tbc"... but logging in today, I can confirm that i'm getting 3% on the second account...

opinions4u

rb10 wrote: »

So basically they aren't giving anything away, but I wouldn't be surprised if they limited the special offer one to one per customer, as they are part of HBOS, and HBOS impose this condition on their similar accounts.

Sainsburys Bank is 50% owned by Sainsburys and 50% owned by HBOS.

It is run on a different systems platform to the Halifax/BOS Savings brand and has its own banking licence and £50k FSCS protection limit, so can be viewed as a separate organisation.

Investor44 wrote: »

The thing I don't understand is why existing savers have to open another account to benefit from this - why can't they just deposit £5000 into their existing account to get the new rate?

Do you really think they want to near treble their rates on their existing savings book?

While not barring existing customers from having the new account, they want to attract new funds from competitors and not turn profitable existing customers in to loss making liabilities.

It is much cheaper to make customers open a new account than to increase the rate on existing balances. Most existing customers won't bother and that inertia is exactly what has made banks £bn profits in the past.