Abbey 7% Fixed Rate Monthly Saver launch 14/07/06

lipidicman

free4440273 wrote:

thanks kazza - my thanks button has gone awol, so thank you for the quick response. can i ask others a quick question? excuse my naivety here, but if i am putting the maximum £250 into this account and i earn 'only' £91 interest at the end of it then, i will try and be diplomatic here, this isn't exactly a great amount is it? so in other words, in order for an account to pay me interest of, say, £1000 at the end of year (which is what i am looking for) i need an interest paying account of 20%!!!. what i am trying to say is, £90 is not a huge amount for paying in £250 each month. i really expected far more. are there any accounts which would pay me between £500-1000 at the end of the year. that would be far more reasonable. thanks. sorry if i have taken this thread onto a different tangent

I am confused and to be fair this is a confusing post.

The maths is quite simple.
At 5% you would need to hold £25000 all year to get £1000 net

You are paying in £250 for 12 months (or 13 with this account, I haven't looked at the details yet) and therefore have an average balance of around £1625. You get 7% on the balance held. The confusion is often that you do not get 7% of £3000 (the total investment), but you do not make a lump sum deposit and so this expectation is completely unrealistic.

codetown

free4440273 wrote:

thanks kazza - my thanks button has gone awol, so thank you for the quick response. can i ask others a quick question? excuse my naivety here, but if i am putting the maximum £250 into this account and i earn 'only' £91 interest at the end of it then, i will try and be diplomatic here, this isn't exactly a great amount is it? so in other words, in order for an account to pay me interest of, say, £1000 at the end of year (which is what i am looking for) i need an interest paying account of 20%!!!. what i am trying to say is, £90 is not a huge amount for paying in £250 each month. i really expected far more. are there any accounts which would pay me between £500-1000 at the end of the year. that would be far more reasonable. thanks. sorry if i have taken this thread onto a different tangent

The rate of interest banks are offering in UK is close to the base rate established by the Bank of England (and in same way upper-bounded by the martgage rates as this is how banks make money).

In UK a 7% rate on an 'safe' investmenet like this is considered very good. There are only limited exceptions of better delas (like the A&L Regular Savers) but all with catches along the way.
To get between 500 and 1000 a year you simply need to save more, i.e. need to have a lump sum that will generate a bigger return.

Or if you have a different risk attitude, go with risky market investements. There are areas out there (emerging markets) that might offer you 10-15% returns (or even more) but with a change to get your capital reduced if things go wrong.

happyshopper

Just wanted to say that I went to the branch near work today at lunchtime to open the Abbey 7% monthly saver, and was told I could have 8% on it if I opened a current account. I said I didn't want to transfer my current account (from Smile) nor would I want to pay my salary in and she said that I didn't have to, and that I also didn't have to deposit any money in the current account. Not planning to use it, but figured I may as well get the extra 1%. Can anybody see a drawback to doing this? Hope not.

happyshopper.

Kazza242

happyshopper wrote:

Just wanted to say that I went to the branch near work today at lunchtime to open the Abbey 7% monthly saver, and was told I could have 8% on it if I opened a current account. I said I didn't want to transfer my current account (from Smile) nor would I want to pay my salary in and she said that I didn't have to, and that I also didn't have to deposit any money in the current account. Not planning to use it, but figured I may as well get the extra 1%. Can anybody see a drawback to doing this? Hope not.

happyshopper.

If they are offering you the 8% rate if you open a current account (without having to pay your salary into it) then why not do it. The only small drawback I can think of is that in opening a current account you could be subjecting yourself to a credit search. In itself, having a credit search done is nothing to worry about, but if you've had a lot of credit searches done lately (i.e. applied for credit a lot in the last six months), then it isn't a good idea to subject yourself to too many searches within a short space of time.

If you haven't made many credit applications lately, then why not go for it and open the current account and regular saver. You might be able to qualify for the Abbey 8% regular saver rate without having to have a credit search done by opening an Abbey basic current account, as it has no credit facilities.

happyshopper

Thanks for that.

Coincidentally, I checked my credit record yesterday on this website:
http://www.annualcreditreport.co.uk/
and it's fine, so I'm not worried about having an extra search on there.

Cheers,

HS

Dagobert

I applied for the 8% regular saver in conjunction with the Special Growth Bond on 18th July. I received the certificate for the bond a couple of weeks ago but have not received any communication regarding the regular saver.

I was told on the phone that they have a huge backlog of applications. Is anybody else experiencing the same problem?

I have no branch access and was told that they have no means of tracing the application.

buses7675

Hi All,

I applied for both of mine about three weeks ago, just got the certificate for the bond today. I did have one letter about the Regular Saver, just asking me to confirm the details of the standing order. As I've set mine up to start from September 1st, as long as it comes through in the next few weeks I'm not too woried!

As they are still advertisiing the 7% version on TV and Radio I wouldn't be suprised if they had a backlog of applications!

Cheers

Steve

$17mma

I hear that Abbey are increasing their rates on savings accts on 1st September in line with the BOE, wonder if this will be reflected on the monthly saver? :money:

lipidicman

Somehow, I doubt it. One of the drawbacks of a fixed rate product

Oh, and why does it take them until september?

mk-donald

Well my experience with opening one of these ABBEY accounts was very poor.

Tried both their local branches but after waiting 5 minutes even to speak to someone gave up at both.

Posted application to them and after 2-3 weeks got a reply saying
(a) Inland Revenue letter confirming £800 paid to my named bank a/c wasn't good enough evidence from IR to identify me;
(b) enclosing their ID checklist, but not actually enclosing it;
(c) giving me another Standing Order document to fill in (as like everyone else I was confused by the first one);
(d) asking me to sign this letter to confirm my address (presumably the IR letter, Utility bill to confirm my address & receiving the letter wasn't enough);
(e) enclosing a NON prepaid envelope to send it all back in.

At this stage I gave up and crossed them off my list of institutions to deal with.