A&L Premier Direct Account - Help

zudecke

Hi Guys,

I am really interested in setting up, what I believe to be a damn good current account with Alliance & Leicester - the Premier Direct Account with 5% interest up to 2500 for 1st year.

When I called up to apply, they offered me the opportunity to transfer my direct debits there and now in order to be applicable for a savings account with 6% and variable interest after 1st year post-maturity. Is that a good deal? I ask because I don't have any DD's with my existing bank and if this is good enough, I'll set one up for my O2 phone with Natwest before applying...

So is the 6% 1st year savings acc with A&L better than most banks bonds, ISAs etc?

scottishblondie

Is this the "Premier Regular Savings" account that you can open when you switch, or some other special account? I can only find the regular saver on their website.

While the rate is excellent if it is the regular saver then it would depend on your circumstances. You have to save a fixed month amount £10-£250, and you cannot make any withdrawls. If you need a flexible savings account then this is probably not for you.

zudecke

Hi Blondie,

Yea, I'm guessing it could probably be that one - they didn't give me a name of the account - just its details.

I probably wouldn't save much anyway, but if the offer is SOOO good, like one that I couldn't find anywhere else ever again, then I should probably take it up.

So I guess my question is - do you guys know of any other savings accounts as good or better than the one scottishblondie refers to in the post above?

scottishblondie

The 5% rate on the current account itself is pretty good, although you do have to pay 500 into it a month, I know a lot of people use it just for savings. I got one when it was 6%, I don't use it as a current account at all just as a nice place to stash a wee chunk of money.

zudecke

Hi,

Why don't you use it as a current account, out of curiosity?

What's wrong with it?

Cheers,

Zudecke

paulw98

Like me, most people just use it as a savings account and pass £500 through it each month. This way you can keep the full £2500 in it all the time. Plust lloydes TSB vantage is a much better current account providing you have over 5k in there

zudecke

Hold on... Are we talking about the A&L Current Premier Direct Acc??

The Lloyds TSB Vantage only pays up to 4% and you need to pass through 1k p/m (not that that's a problem - just can't see how it's better than the A&L one).
Plus with A&L you get 0% int on your OD and a 6% int savings account to go with it..

Just saying...

paulw98

I wasnt clear, I meant that IMO the AL is better to use as a savings account and then have a vantage with 5k plus in as a current account
that way all your money is earning the best possible interest.

zudecke

But still.. A current offering 5% and a savings offering 6% is surely better than either combination with the TSB Vantages which only offers 4%... Unless I'm missing something? Keen to know!

blueberrypie

zudecke wrote: »

But still.. A current offering 5% and a savings offering 6% is surely better than either combination with the TSB Vantages which only offers 4%... Unless I'm missing something? Keen to know!

You're missing several things.

First, the A&L account which offers 6% is a Regular Saver. That means that you cannot make a lump sum deposit - you can only deposit a certain amount in the first month, and you must make another deposit of the same amount each month for the year. So let's say you deposit £3000 (the maximum) in total. For the first month, you are only getting 6% interest on the first deposit - £250. In the second month, you will get 6% interest on £500...and so on, until the end of the year, when you are finally getting 6% interest on the full £3000.

Because of this (and this applies to all Regular Savings), the amount of interest you earn over the course of the year is about half of what it would be if you were to deposit a lump sum of the same amount at that interest rate. Regular Savings accounts do have their place - they're good for, erm, well, regular savings :-) - but if you have a lump sum to start with, you would be better off earning 4% on the full amount in the Vantage account.

You could, of course, put your lump sum in a Vantage account and drip-feed it to the A&L Regular Saver. However...

Second thing: no withdrawals are allowed, so your money is tied up for a year - whereas with an Instant Access account or a Current account, you have access whenever you want.

Third thing: you must open a Premier Direct Current account at the same time. You must use A&L's switching service. Many people on these forums have discovered that A&L wriggle out of deals using this - they seem to have a "habit" of not getting everything switched within the 11-week period they specify, and then you don't get the bonus. (I believe there may also be a requirement for a certain number of DD/SOs to be switched.)

Yes, the Premier Direct pays 5% - on balances up to £2500. You must fund it with a minimum of £500 each month or you not only lose the interest, but you incur fees. You can, of course, transfer £500 out of it into another account and then back in again - but A&L will only let you transfer £250 by FP, so you'll have to do it over two days, or do it by BACS (losing interest for three days).

Fourth thing: The 0% overdraft offer is not guaranteed. It is subject to their approval, and one of the conditions of it is that you must have been in credit on your old bank account for a certain number of days in the previous month. There are other conditions too. So don't rely on getting that.

Fifth thing: A&L's service is notoriously bad. Really, really bad. I don't think there is any other banking institution which gets as many complaints on these forums. Their Faster Payments implementation is woeful. All of your outgoings must be covered by funds which are in your account by the end of the *previous* day. Transfers between accounts in your own name aren't instant - if you transfer from one account to another, the funds don't become available in the second account until the next day. The on-line banking is a joke. There's more - if you want more info, do some reading on this forum.

scottishblondie

Sorry for the slow reply, I went out for dinner. The above posts pretty much cover all the ground but here goes...

Zudecke, there are many reasons I do not use A&L as a current account, the main one being that I am a PG student and still have an interest free OD available at the Halifax (even tho I don't use it, it's a nice safety net) which would be withdrawn if I stopped paying my stipend into it. I've been a Halifax customer for some time, and while I have heard a lot of complaints about them on here, I have been very happy with their customer service. I also think their online banking is good and is probably my favourite system out of all the banks I'm with. Also I have heard a lot of bad things about A&L, and while I haven't yet had a problem with them I wouldn't want to risk anything going wrong when I'm happy with the service I already have.

Aside from that, I prefer to keep a lump sum in A&L and use it as a savings account because of the interest rate - which is a lot better than most savings account right now! I make the £500 payment into it every month, and as I accumulate £2500 I plan to move the excess over into a Lloyds Vantage account earning 4%. While it has a lower interest rate, it's still better than many proper savings accounts and I can keep a lot more money in it. I also want the instant access that keeping money in a high-interest current account provides, I'm aiming to graduate next year so I wouldn't want to tie my money up for more than say 6-9 months at this point.

If you have money to fund the regular saver that you definitely won't need for a year, then yes 6% is a good rate, otherwise there isn't much point in bothering. It all depends on your personal circumstances really.

PS - If haven't already opened a Premier Direct and all this hasn't put you off go thru Topcashback or Quidco and make yourself an extra £45