Tesco internet saver rate dropped from 3.25% to 3% from 16 April

SnowMan

Tesco savings have reduced the interest rate from today (16/4/09) on their internet saver from 3.25% AER (1.75% + 1.5%) to 3% AER (1.5% + 1.5%). These are the rates that apply to those qualifying for the 1.5% 12 month bonus through opening the account between 29 May 2008 and 7 January 2009.

See here on the Tesco website for confirmation (you need to scroll down to where it says the underlying rate is now 1.5%)

They have introduced a new version ("new" only because of the bonus rate) of the internet saver account with a 1% 12 month bonus currently paying 2.5% AER (=1.5% +1%). This is only available to “new customers”.

PurpleBox

Hopefully this will be their last rate drop.

PurpleBox

SnowMan

PurpleBox wrote: »

Hopefully this will be their last rate drop.

Yes. Let's hope so.

To look on the positive side at least savers with the pre 7 January 1.5% bonus account are still getting 0.5% more than savers opening new accounts with Tesco. So in the short term the rate may remain competitive as they are presumably still trying to attract new money in, and the two accounts are still linked by way of the underlying 1.5% rate.

Worth mentioning that anyone with the no longer available Nat West 2.1% bonus account should move money across there, as that account has the same Faster Payment and multiple payee features as well as a 3.24% AER.

bagsacash

Tesco savings have reduced the interest rate from today (16/4/09) on their internet saver from 3.25% AER (1.75% + 1.5%) to 3% AER (1.5% + 1.5%). These are the rates that apply to those qualifying for the 1.5% 12 month bonus through opening the account between 29 May 2008 and 7 January 2009.

Is that so, well if my savings are now only paying 3% its time I shifted my money out from Tesco.Tesco aren't very loyal to their existing customers.

bagsacash

Are you sure the internet saver have dropped their rate, it says on the sight that its now 2.5% and the previous rate was 1.75%

The bonus has been dropped for new customers from 1.5% to 1%

jem16

bagsacash wrote: »

Are you sure the internet saver have dropped their rate, it says on the sight that its now 2.5% and the previous rate was 1.75%

That's right it is now 1.5% plus 1% bonus making 2.5%. It was previously 1.75%. For those with the earlier bonus it is now 1.5% plus 1.5% making 3% as opposed to 1.75% plus 1.5% making 3.25%.

PurpleBox

bagsacash wrote: »

Is that so, well if my savings are now only paying 3% its time I shifted my money out from Tesco.Tesco aren't very loyal to their existing customers.

You won't get a much better deal elsewhere - and Tesco have a full implementation of Faster Payments that they inherited from RBS.

PurpleBox

SnowMan

bagsacash wrote: »

Are you sure the internet saver have dropped their rate, it says on the sight that its now 2.5% and the previous rate was 1.75%

The bonus has been dropped for new customers from 1.5% to 1%

Yes. I am sure the rate has dropped to 3%.

But it is very poor the way they have either deliberately or incompetently hidden what has gone on behind the introduction of the new and different bonus.

The key point is that the underlying rate without bonus has dropped from 1.75% to 1.5%. And the underlying rate applies to all internet only accounts old and new.

For the (1.5% bonus) pre 7/1/09 account with the 1.5% bonus the rate is then 3% (= 1.5% + 1.5%)

For accounts opened between 8/1/09 and 15/4/09 the rate is 1.5% (=1.5% + 0%)

And for (1% bonus) accounts opened from 16/4/09 the rate is 2.5% (=1.5% + 1%)

The 0.5% reduction is also reported by moneyfacts

bagsacash

Transfer done, if tesco can't be loyal to me then my money is better off elsewhere.

bagsacash

I just phoned them it has dropped to 3% thats why I transfered all my cash out

Innys

bagsacash wrote: »

I just phoned them it has dropped to 3% thats why I transfered all my cash out

Tesco is where the positive balance on my Egg Money Card is likely to end up.

3% is a good rate at the moment. There aren't many others offering the same rate with instant access.