first direct e-savings scam

spl0dge_2

http://firstdirect.com/saveinvest/esavings.shtml

paying 5%, but they have this shocking clause....

instant access to your money (although no interest is paid in any month you make a withdrawal).

so even if you only make 1 withdrawal per year, your rate effectively drops from 5% to 5%*11/12=4.58%.

skiddy2k

yeh, sounds about right, you loose out on your AER, which is your compound interest.

many savings account do this so that you dont take any money out of your account

Walletwatch

As the previous post says, lots of high-interest paying savings and current accounts have this as a condition. The effect is not as apparent when an account pays monthly interest, but the math works out to the same deduction amount.

Milarky

This is a 'one account per person' product, I understand.

Can a husband and wife [i.e. joint current account] have one separate e savings in each person's name I wonder?

If they could then the account could be operated as follows in theory:

1) Make only ONE [or no] withdrawal from ONE account only and if so withdraw the whole balance [less £1] on the 1st day on the month to the joint account

2) Transfer any amount in excess of what is needed to the second e savings account.

3) After the start of the the following month - once interest becomes payable again - deposit without restriction into the first e savings account again.

If a second account is not possible [e.g. single account holder] then a 'second best' option is to use the FD Savings account [paying 3.25%] as the 'holding' account for the month. [Certainly it is possible to do better than just getting no interest whatsoever!]

However, why not get an ING direct account and link this to the FD bank account instead? Same interest paid but without restrictions. The only 'benefit' from a FD e savings account is immediate transfers between accounts as far as I can see.

blinko

check out bradford and bingley they have a top rate monthly savings account

Reaper

I'm a fan of FD's bank account and their Offset mortage looks good, but I wouldn't use their savings accounts. Apart from an ISA which was once (briefly!) competitive I have always found I can get better rates elsewhere.