How is a 2% Variable Award Calculated

GandalfTheTight

Just moved my Alliance & Leicester ISA to their Direct ISA Issue 5. Did it in the branch – another waste of an hour!
But this years allowance I put in the Reward ISA which is 1.50% (variable) with a 2% reward if you leave it in there for 12 months

In the small print I noticed the reward is ‘variable’

But what amazed me was that neither the manager we were talking to NOR the branch manager could find the terms and conditions to tell me what that meant.

I.e. will the 2% go up and down during the year or will it just be something else at the end?

They did not know

By this time I had lost the will to live and took out the ISA anyway (I can always move it)

I just wondered if anyone knew how a 2.00% ‘Award’ can be variable and what the terms were

(Think it is the same offer for all the Santander Group)

Thanks

GTT

alastair_h

I think the interest is made up of a variable rate part either 1% under 9k or 1.5% over 9k as below and the bonus rate of 1.5% is fixed (I don't see how the reward could be variable).

Making 2.5% for below 9k and 3% above 9k (with a variable component).

https://www.alliance-leicester.co.uk/savings/interest-rates.aspx

Direct ISA Issue 5 (accounts beginning with 394, 395)

Annual gross Gross p.a./AER £1 - £8,999 2.50% 2.50% £9,000 + 3.00% 3.00%
Rates effective from 4 March 2009. Rate includes a bonus payable until 5 April 2010. Variable rate without bonus currently £1 - £8,999 1.00% gross p.a., £9,000+ 1.50% gross p.a.

GandalfTheTight

alastair_h wrote: »

(I don't see how the reward could be variable).

It definately IS and that is what I don't understand

Baldur

I think the interest is made up of a variable rate part either 1% under 9k or 1.5% over 9k as below and the bonus rate of 1.5% is fixed (I don't see how the reward could be variable).

Why not? All it takes is what A&L have done, i.e. specify it as variable in the product's Terms & Conditions. Both Abbey and A&L are past masters at writing 'gotchas' into the small print of their Cash ISA bonuses, even before they were incorpoated into the Santander group.

The bonuses on both the Direct ISA issue 5 and the Direct Saver are clearly shown to be variable here - https://www.alliance-leicester.co.uk/Savings/savings-summary-pop.aspx

alastair_h

Baldur wrote: »

Both Abbey and A&L are past masters at writing 'gotchas' into the small print of their Cash ISA bonuses, even before they were incorpoated into the Santander group.

Yes you're right - sorry missed that little gem! That's pretty sneaky - lulls you in and bang - it's basically just a variable rate ISA. :eek:

GandalfTheTight

But it still doesn't say how it is calculated