Closing Halifax Web Saver Reward early

glider3560

Does anyone know what interest rate you earn on a Halifax Web Saver Reward that is closed before the year has ended?

I opened a 2.5% account in June but have now opened their 3% account.

To simplify things, I like to close old accounts rather than keep them open. What rate would I receive on closure, 2.5% or 0.1%? I haven't yet made any withdrawals this year, so I assume closure counts as the first and only withdrawal.

opinions4u

The T&Cs state on page 24:

For Halifax Web Saver Rewards opened during
the limited period from 8 June 2009 to 19 July
2009, the fixed reward interest rate applies
for a year following receipt of the opening
deposit into your variable rate without card
option; provided you keep between £1 and £9
million in your option and make no more than 4
withdrawals during the 12 month reward period.
If more than 4 withdrawals are made during
the 12 month reward period, the variable rate
Halifax Web Saver (without card) interest rate
and account conditions apply to your account

from the date of the fifth withdrawal.

I read that as saying you get the rate until you break the conditions.

Personally I'd leave the account open with £1 in it though.

The new Guaranteed Saver Reward, however, requires you to comply with the conditions for a full year.

Rollinghome

You should get the full rate with the bonus. If you'd made more than 4 withdrawals you'd get the lower rate from that point onward.

Is the new account you're going for the Guaranteed Saver Reward which pays 3% if you've a qualifying current account. I noticed that despite the name the rate is variable which seems an interesting use of the word "guaranteed".

rb10

I agree with the other posters, would expect you to get the full rate.

Be aware though that (I think) the Guaranteed Saver Reward works differently - if you close that one early, or let the balance fall below £2500 you only get the lower (currently 0.5%) rate for the whole year.

opinions4u

Rollinghome wrote: »

Is the new account you're going for the Guaranteed Saver Reward which pays 3% if you've a qualifying current account. I noticed that despite the name the rate is variable which seems an interesting use of the word "guaranteed".

Their web site states: "Variable interest - guaranteed to be at least 1% above the standard Halifax Guaranteed Saver variable interest rate for 12 months from receipt of your opening deposit." - so a guaranteed premium to BofE rate for 12 months.

Rollinghome

opinions4u wrote: »

Their web site states: "Variable interest - guaranteed to be at least 1% above the standard Halifax Guaranteed Saver variable interest rate for 12 months from receipt of your opening deposit." - so a guaranteed premium to BofE rate for 12 months.

Yes, I saw that but as the basic rate on their Guaranteed Saver is just 0.50% (for over £2500), the extra 1% could give just a total gross return of 1.5% and still meet that condition.

They say "the (Halifax Guaranteed Saver) interest rate is guaranteed to be no lower than 0.50% below the Bank of England base rate" which isn't the same as equalling the BoE rate. 0.50% below base is 0.0%

Additionally the Halifax Web Saver account is now down to just 0.20% for balances over £25k and as little as 0.10% for smaller sums. So presumably they could do the same with their Guaranteed Saver which would reduce the "guaranteed" return from 2.5% to 1.1%.

None of that seems much of a guarantee to me and I wonder what the ASA would make of using that term?


.

opinions4u

Rollinghome wrote: »

None of that seems much of a guarantee to me and I wonder what the ASA would make of using that term?

Given the ease of clarity that you have just applied to it, very little.

They have stated what the guarantees are.

They will, presumably, honour them.

Where have they misled?

Rollinghome

opinions4u wrote: »

Given the ease of clarity that you have just applied to it, very little.

They have stated what the guarantees are.

They will, presumably, honour them.

Where have they misled?

Hardly what I would describe as "ease of clarity". The term "misled" has been used by you alone, not me.

Rollinghome

rb10 wrote: »

Be aware though that (I think) the Guaranteed Saver Reward works differently - if you close that one early, or let the balance fall below £2500 you only get the lower (currently 0.5%) rate for the whole year.

I didn't notice that in the summary box but it is as you say, buried in the t&cs.

"If you close your Halifax Guaranteed Saver Reward account during the reward year, the standard Halifax Guaranteed Saver variable interest rate will apply to your account from the time of account opening." The Guaranteed Saver current rate being 0.5%

So as they can drop the rate including the "reward" to as little as 1% a saver could find themselves effectively locked with the only alternative of losing the "reward" for the entire 12 months.

If I've understood that right it seems an account to be avoided.

rb10

Rollinghome wrote: »

So as they can drop the rate including the "reward" to as little as 1% a saver could find themselves effectively locked with the only alternative of losing the "reward" for the entire 12 months.

In the event of this happening, you could withdraw everything apart from £2500 (assuming you've left a free withdrawal), so just this amount would be earning 1% (not that you even want that!).

However, with other accounts, Halifax have been very fair with their interest rates, and I would be very surprised if this account did anything other than track the BOE rate +/- a small margin. I would have complete confidence putting my money here (although the AA at 3.15% is not only a higher rate but also more flexible!).

Rollinghome

rb10 wrote: »

In the event of this happening, you could withdraw everything apart from £2500 (assuming you've left a free withdrawal), so just this amount would be earning 1% (not that you even want that!).

However, with other accounts, Halifax have been very fair with their interest rates, and I would be very surprised if this account did anything other than track the BOE rate +/- a small margin. I would have complete confidence putting my money here (although the AA at 3.15% is not only a higher rate but also more flexible!).

Would agree with you on the AA account. That offers unlimited instant access with a guaranteed 12-month bonus of 2.65%. So that's the least you should get even if they dropped the underlying rate to zero.

Haven't ploughed through the Halifax terms but have you noticed whether, if the balance falls below £2.5k, the reward earned prior to that is retained? Which would allow someone to pull out all but £1 earning 0.1%. Would still mean they couldn't close the account to get the interest to compound or to crystalise it for tax purposes.