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

Milarky

s71hj wrote:

what's the best way to open this account - pay in right at the end of one month then change s/o to first day of next month like lloyds, or does it not make any difference with this account. Presumably the most efficient way to fund it interest wise is from an abbey current account where transfers would be instant, but other than this are there any other current accounts that do the transfer of funds quicker.

They ask you to stipulate a date earlier than 21st in the month on the standing order form they send you (as part of the application) They try to be fair by going to the end of the 'month 13'

4. Opening the Account
i. The Account must be open with a nil balance
ii You must set up a standing order to start from the next calendar month following opening. The standing order must be for an amount £20 and £250 to be credited to the Account monthly.
iii You must arrange your standing order to leave your originating account between 1st and 21st of each month.

8. Term
i The Account will mature automatically into an Abbey Montlhy Saver account after close of business on the 1st of the month following your 13th monthly payment into the account.

The best option therefore is to make payments on 1st of the month - always hitting the Abbey account no earlier than 3rd - so that 13 payments are received at more or less equal intervals and the final payment (on the anniversary of the first payment) has up to a full month in the account - as it always get paid up on the 1st regardless.

The most interest is earned this way - you actually deposit £3250 at £250pcm not £3000 - and it equates to '91/156*ths' of whatever rate over the full amount paid in.

Shave '2' off that to allow for the minimal delay whilst payments take two+ days to travel from your bank and it's about '89/156ths' instead.

At 7% that would be about 3.99% gross of the amount paid in

At 8% that would be abour 4.56% gross of the amount paid in

*That's 13/12ths of a year for the first payment plus 12/12th for the second payment .. and so on down to the last payment which spends only 1/12th in the account. 1+2+3+...+11+12+13 = 91/12ths. But since each payment is 1/13th of the total amount paid in this sum is 91/(12 x 13)ths or 91/156ths

So on £3250 at '7%' you could get about £130 gross and at '8%' it could be about £148.50.

Please remember that the reason you get less than the headline is that the money is added in stages and not all at the outset.

s71hj

s71hj wrote:

what's the best way to open this account - pay in right at the end of one month then change s/o to first day of next month like lloyds, or does it not make any difference with this account. Presumably the most efficient way to fund it interest wise is from an abbey current account where transfers would be instant, but other than this are there any other current accounts that do the transfer of funds quicker.

Sorry to quote myself, but I think I've partly answered my own question in this thread:
http://forums.moneysavingexpert.com/showthread.html?t=256264
If you set up the s/o from a lloyds current account (which anybody who is addicted to high rate regular savers like I am would have for their 8% account), you continue to get interest from lloyds for 3 days after the money leaves your lloyds account. Even better, if you fund the lloyds account in the first place with a cheque from another high interest current account of your own (eg Halifax, A+L), you can double up your interest, as lloyds pay you interest from when you pass the cheque over the counter, yet you continue to receive interest on it for another 3 days at least at your other account. Better still, pay cheque in on a Thursday, and you probably get 5 or 6 days of double interest...........

Sorry, I think I got a bit excited there!

Dagobert

s71hj wrote:

lloyds pay you interest from when you pass the cheque over the counter, yet you continue to receive interest on it for another 3 days at least at your other account. ...

I strongly doubt that your money will continue to receive interest once the cheque has been issued.

The account will be closed first, then the cheque is issued, which will not be drawn on your Abbey savings account.

Dagobert

Rant

Abbey completed the standing order slip and sent it directly to my bank, the Coventry BS.

Last week, on Monday, the first payment went out. Yesterday, I was notified that the payment was rejected due to invalid details. The Abbey regular saver account number in the reference field was incorrect!

The account number entered should have ended with 3 letters, which were missing from the SO reference. I had checked the SO confirmation Coventry had sent out but as the Abbey welcome letter had also omitted the last 3 characters from the a/c number, I had no way of knowing that the reference was wrong.

The £250 monthly payment is going to be returned in a few days; loss of interest only £1. But had the SO been set up towards the end of the month, it would have been too late to schedule another payment and the account T&Cs would have been violated.

Abbey do not have a copy of the SO slip they sent. And the Coventry advisor didn't see the problem with it and would or could not tell me whether they have the instructions still.

buses7675

Hi All,

I can second the above, Abbey neglected to tell LloydsTSB how often my payment is meant to be made!

Well done Abbey, considering they are a bank too you'd think they'd get this sort of simple stuff right!

Cheers

Steve

david78

I'm not too impressed with Abbey.

They have taken 8 weeks to open this account for me. I applied by post. There was a delay initially while I filled in a standing order form and send it to them.

Now they have sent me a "welcome" letter saying I can visit a branch for a passbook and need to make sure I have set up a standing order? Eh!

How do I know they have forwarded the form on to my bank?

I have checked online and no standing order is set up yet. I think I should wait until the date of the first payment (3rd Oct) has passed, and if no standing order has been setup, do this myself online from say the 6th Oct.

Do you think this is a good plan? If so, please can someone confirm that the reference account number is of the form X0000000 ABC where X ABC are letters and 0 are digits (7 of them).

RayWolfe

Don't rely on them to do it for you. When I set up with Abbey they gave me back the form and gave me the responsibility to give the form to my bank. That has been my experience with other monthly savers. Do it youself and you know it's done.
Ray

RayWolfe

Yes, I can confirm:
1 alpha
7 numeric
3 alpha
Ray

Dagobert

david78 wrote:

can someone confirm that the reference account number is of the form X0000000 ABC

Correct. ABC should be the first 3 letters of your surname.

PBA

As an Abbey branch staff member, I'll try and answer a few questions I've seen in this thread.

The reference on the standing order should be W, then 6-8 digits, then the first three letters of the surname of the first account holder at the time they opened the account. There are no spaces between any of these, and nothing else should appear on the reference.

Buses: The standing order is preprinted, all that's filled in manually is the amount and reference number. If Lloyds didn't know how often to send the payment then they didn't read it. Not Abbey's fault.

Matt: Terms and conditions say that you can only make one payment in a month. However I'm not sure that the systems are clever enough to notice that it's more than one payment, so you should be ok. However it may be the case that accounts are checked manually, so might not be worth taking the risk.

The comment on this that did make me laugh a bit:

Dagobert wrote:

after maturity...accruing a paltry interest rate during that period

After maturity the account pays 5%. You must be a really keen MSE member to consider this "paltry"!!!