Abbey loophole: 5% interest on up to £50k savings (near instant access)! (Under 35s)

edited 1 December 2009 at 3:44PM in Savings & Investments
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TheJimsterTheJimster Forumite
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edited 1 December 2009 at 3:44PM in Savings & Investments
I notice that the following account pays 5% interest, but you can only pay in £5000 to start and £300 per month.
http://www.abbey.com/csgs/Satellite?appID=abbey.internet.Abbeycom&canal=CABBEYCOM&cid=1210611105334&empr=Abbeycom&leng=en_GB&pagename=Abbeycom%2FPage%2FWC_ACOM_TemplateB2

Save – Make an initial deposit of between £100 and £5000 and then save between £100 and £300 per month by standing order to get the preferential rate. You will receive a lower rate of 0.10% gross/AER when you pay in under £100 or over £300 in any calendar month, but for that month only. The maximum balance on the account is £50,000.

However, the underlined section above seems to suggest it's possible to open this account with £100, and on the final day of the month chuck in a massive wodge of cash (say £30k), get 0.1% for the next 24 hours until the next calender month starts, and then, bingo! you will get 5% on your massive wodge of cash (so long as you keep up the monthly funding requirements) on an ongoing basis.

Downside: you have to do an interview before getting your wodge back.

Upside: 5% interest on your wodge!

Any problems with this approach?
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Replies

  • N1AKN1AK Forumite
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    Good spot and a idea that I am very interested to see if someone has further information on. My partner and I would happily take 5% on the savings we have for our deposit.
    Having a signature removed for mentioning the removal of a previous signature. Blackwhite bellyfeel double plus good...
  • JonbvnJonbvn Forumite
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    It is called a FIRST HOME SAVER. This probably implies that it is conditional upon taking out a FTB mortgage with Abbey.
    In case you hadn't already worked it out - the entire global financial system is predicated on the assumption that you're an idiot:cool:
  • edited 1 December 2009 at 2:57PM
    atypicalatypical Forumite
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    edited 1 December 2009 at 2:57PM
    You don't have to take out a mortgage, they'll just try to sell you one when you close the account.

    Note it says "all we ask you to do is have a mortgage interview up to 90 days before you come to close the account". Why not answer 'no thanks' or am I reading it too literally?
  • JonbvnJonbvn Forumite
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    atypical wrote: »
    Note it says "all we ask you to do is have a mortgage interview up to 90 days before you come to close the account". I'm sure you can answer with a no thanks.

    Thanks for the info. Pity we're not FTB's!
    In case you hadn't already worked it out - the entire global financial system is predicated on the assumption that you're an idiot:cool:
  • socratessocrates Forumite
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    Eligibility - To qualify for a First Home Saver (Special Issue 1) you must be:
    1. Under the age of 35
    2. A first time buyer
  • G_MG_M Forumite
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    Interesting, but instant access?

    "all we ask you to do is have a mortgage interview up to 90 days before you come to close the account."
    "Please note there are no partial withdrawals allowed on this account. You can access your funds at any time but will need to close your account. "
  • dazerukdazeruk Forumite
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    TheJimster wrote: »
    Save – Make an initial deposit of between £100 and £5000 and then save between £100 and £300 per month by standing order to get the preferential rate. You will receive a lower rate of 0.10% gross/AER when you pay in under £100 or over £300 in any calendar month, but for that month only. The maximum balance on the account is £50,000.

    However, the underlined section above seems to suggest it's possible to open this account with £100, and on the final day of the month chuck in a massive wodge of cash (say £30k), get 0.1% for the next 24 hours until the next calender month starts, and then, bingo! you will get 5% on your massive wodge of cash (so long as you keep up the monthly funding requirements) on an ongoing basis.

    You get the reduced rate of 0.1% for the whole month if you deposit over £300, not just for the few remaining days.
  • 23rdian23rdian Forumite
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    Looks good but nothing stops them dropping the rate right?
  • aptapt Forumite
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    When Abbey/Bradford and Bingley launched a 6% Regular Saver earlier year someone had the same idea - pile in with a lump sum and get 6% apart from the first month. That 'loophole' did not work as Abbey indicated it would close the account and return your money without interest. I expect this attempt would meet a similar fate.
  • N1AKN1AK Forumite
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    dazeruk wrote: »
    You get the reduced rate of 0.1% for the whole month if you deposit over £300, not just for the few remaining days.

    If you open an account with £100, then add £30,000 on the 25th of the month you will get 0.1% interest for the whole of the month. However as you effectively had no money in there for 5/6ths of the month you are really only 'getting' 0.1% interest for the 5-6 days the money is in there.
    Having a signature removed for mentioning the removal of a previous signature. Blackwhite bellyfeel double plus good...
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