Santander eSaver?

Happychappy

Catbells wrote: »

I've just sold my house and after buying a new one am able to put £50k away for investment purposes. I have talked to the local Santander manager and was thinking about their eSaver which has 2.75 variable rate of interest and can be managed online. Being a total idiot about these things I just wanted to ask if anyone else would recommend this account and what variable means. Any information welcomed. Thanks.

I wouldn't go near Santandar with a barge pole, their customer service is appalling :mad:

LongTermLurker

Aberdeenangarse wrote: »

Where's the spam button? Don't newbies get it?

Bottom right of the post - "thanks", "quote" ... "abuse", "spam"

(btw, "abuse" means "it is abuse", not "to abuse" the poster - that'd be nice at times )

Don't know if new posters don't get to see it - I'd be surprised if that's the case, but it's clear enough if it's there.

KiKi

Catbells wrote: »

I've just sold my house and after buying a new one am able to put £50k away for investment purposes. I have talked to the local Santander manager and was thinking about their eSaver which has 2.75 variable rate of interest and can be managed online. Being a total idiot about these things I just wanted to ask if anyone else would recommend this account and what variable means. Any information welcomed. Thanks.

Hi Catbells

Just so you're clear (if you're speaking to Santander) 'saving' (where your money is safe) is not the same as 'investing' (where you might not get back as much as you put in). So make sure you use the right terminology with them in case they do something with your money that you don't want them to!

I have the E-saver and, yes, the 2.75 rate is good, but it's only for one year as it has a bonus attached. I use that for everyday savings. It's managed online and you can access your account any time, using a cash machine, or transferring online.

Two options for you (you should do both if you want to make the most of your money):

1 - put £5100 into an ISA (Individual Savings Account) if you don't already have one that you've put money into this year. An ISA is a savings account where you don't pay tax on the interest it earns. You can put in up to £5100 a year, but if you take it out, you can't put it back in again. So it's an account you put in and shouldn't touch if you want to make the most of it.

2 - After you've used your ISA allowance, you could consider opening the Santander Tracker Bond. There is a 'loyalty' version at 3.25% for current customers, but also a 3% version for new customers. You asked about 'variable' and I'll explain them all to you so you understand:

* Fixed: means that the percentage you make as interest (eg, 3%) stays the same for a certain period of time

* Variable: the bank change the interest rate at any time, up or down. It often goes up or down in line with the Bank Of England changing the interest rate (currently 0.5%), but that's not always the case. The banks are often keen NOT to raise the interest that people make on savings, as you can imagine!

* Tracker: the savings account 'tracks' the Bank of England's interest rate movements. So if the BOE rate goes up by 0.25% then the savings account interest rate also goes up by 0.25%.

The Santander Tracker Bond account is, as the name suggests, a tracker. It tracks at 2.5% above the BOE rate (ie, currently 0.5% plus 2.5%). This is a good deal at the moment because the BOE rate can't get much lower, but if it goes up then the interest rate you get on the savings also goes up! However, once the money is in the 'bond' you cannot touch it until 01/10/11. You can't access it or close the account. So don't put your money there if there's a chance you'll need it.

You *could* put it away for longer, but locking your savings into a particular interest rate for 3 years might not be wise, as the economic situation might change drastically over the next year.

Santander are not known for amazing customer service, but personally I've had no problem opening the account, putting the money in - and then I can't touch it until next year anyway! I've also got a mortgage and many other savings with them, and have no problems with their service, generally.

HTH
KiKi

Catbells

Aberdeenangarse wrote: »

Where's the spam button? Don't newbies get it?

You need to know its SPam before you go to the spam button. How do you recognise spam? Please tell me then I will know in future.

Catbells

LongTermLurker wrote: »

Bottom right of the post - "thanks", "quote" ... "abuse", "spam"

(btw, "abuse" means "it is abuse", not "to abuse" the poster - that'd be nice at times )

Don't know if new posters don't get to see it - I'd be surprised if that's the case, but it's clear enough if it's there.

Yes its clear enough but if you don't realise its spam in the first place you're not likely to report it as spam.

Catbells

KiKi wrote: »

Hi Catbells

Just so you're clear (if you're speaking to Santander) 'saving' (where your money is safe) is not the same as 'investing' (where you might not get back as much as you put in). So make sure you use the right terminology with them in case they do something with your money that you don't want them to!

I have the E-saver and, yes, the 2.75 rate is good, but it's only for one year as it has a bonus attached. I use that for everyday savings. It's managed online and you can access your account any time, using a cash machine, or transferring online.

Two options for you (you should do both if you want to make the most of your money):

1 - put £5100 into an ISA (Individual Savings Account) if you don't already have one that you've put money into this year. An ISA is a savings account where you don't pay tax on the interest it earns. You can put in up to £5100 a year, but if you take it out, you can't put it back in again. So it's an account you put in and shouldn't touch if you want to make the most of it.

2 - After you've used your ISA allowance, you could consider opening the Santander Tracker Bond. There is a 'loyalty' version at 3.25% for current customers, but also a 3% version for new customers. You asked about 'variable' and I'll explain them all to you so you understand:

* Fixed: means that the percentage you make as interest (eg, 3%) stays the same for a certain period of time

* Variable: the bank change the interest rate at any time, up or down. It often goes up or down in line with the Bank Of England changing the interest rate (currently 0.5%), but that's not always the case. The banks are often keen NOT to raise the interest that people make on savings, as you can imagine!

* Tracker: the savings account 'tracks' the Bank of England's interest rate movements. So if the BOE rate goes up by 0.25% then the savings account interest rate also goes up by 0.25%.

The Santander Tracker Bond account is, as the name suggests, a tracker. It tracks at 2.5% above the BOE rate (ie, currently 0.5% plus 2.5%). This is a good deal at the moment because the BOE rate can't get much lower, but if it goes up then the interest rate you get on the savings also goes up! However, once the money is in the 'bond' you cannot touch it until 01/10/11. You can't access it or close the account. So don't put your money there if there's a chance you'll need it.

You *could* put it away for longer, but locking your savings into a particular interest rate for 3 years might not be wise, as the economic situation might change drastically over the next year.

Santander are not known for amazing customer service, but personally I've had no problem opening the account, putting the money in - and then I can't touch it until next year anyway! I've also got a mortgage and many other savings with them, and have no problems with their service, generally.

HTH
KiKi

Very kind of you to give such a long answer - thank you.

I have topped up my ISA - you're only allowed one - right?

The Tracker option with Santander sounds attractive from the point of view as you mentioned that base rates can't stay down for much longer and the returns would be good once they turn around. I can live without the funds for a year or more so it would suit me. I'm going to the branch today to discuss this as its better than the variable one at 2.75 which I mentioned at the beg of this thread.

Yes, I've seen more than one complaint about customer service with Santander and in fact I left Abbey a few years ago because of this but with an online account left for a year who needs service anyways.!

I hope they nudge you when the year is up as I think you have to take the money out and start a new one - right?

Rov

It's not much of an "investment" with CPI at 3.1% and RPI at 4.7% your saving rate, even with it's bonus, is negative relative to inflation so your pot is dwindling in real terms.
Welcome to the wonderful world of savers!

KiKi

Catbells wrote: »

Very kind of you to give such a long answer - thank you.

You're very welcome.

I have topped up my ISA - you're only allowed one - right?

You can only put the maximum allowance into one account in any financial year. However, you can have more than one account. I have opened a new one this year with the highest interest at the time (as it took new cash only); transferred all previous years into a higher paying one which accepted transfers in; and I have a couple of ones fixed from some years ago at very high rates (so I haven't moved them yet as the rates are higher than those currently on offer).

If your ISA doesn't have a good rate, then you can open a new ISA (one which allows money to be transferred in) and transfer your money over. The important thing about moving ISAs is to NEVER take the money out and then try and put it in another account. You need to tell the new ISA account provider to transfer the money from your other account.

The Tracker option with Santander sounds attractive from the point of view as you mentioned that base rates can't stay down for much longer and the returns would be good once they turn around. I can live without the funds for a year or more so it would suit me. I'm going to the branch today to discuss this as its better than the variable one at 2.75 which I mentioned at the beg of this thread.

Well, the current 3.25% offer is very good anyway; other accounts offer similar, but they are fixed so if interest rates go up, you're still stuck around the 3% mark. As the Santander one can only go up it's a winner!

Yes, I've seen more than one complaint about customer service with Santander and in fact I left Abbey a few years ago because of this but with an online account left for a year who needs service anyways.!

Precisely. Plus I see most poor service comments relating to bank accounts; it's the one product I won't take out with them!

I hope they nudge you when the year is up as I think you have to take the money out and start a new one - right?

They write to you with your options. But I recommend you diarise it anyway just in case you don't get the letter. I would *suspect* (the T&Cs imply this) that if you don't tell them otherwise that they automatically transfer the money into a new (lower-paying!) bond which you then can't access for another year. So diarise to contact them in early September to put on record that you want the cash to be transferred to a particular account. Then send a letter, Recorded Delivery!

KiKi

Catbells

OK. I've learnt that what I need is not a savings account but an investment setup.

Just been into local Santander to enquire about the Tracker savings account but when I explained my situation - that I had around £50k to invest for the next few years - the manager suggested yet another plan. The guaranteed return plan which has 2 elements 1. ISA + cash and 2. ISA + unit trusts and you are guaranteed 10% over a 5 year minimum period. Now this sounds very good but I'd be keen to hear any supporters, dissenters or merchants of doom - I listen to everyone on here:)

OR there is the RBS UK Growth Early Kick OUt Plan. Anyone? RBS have a good name and instil confidence (even if they are lacking in other senses).

KiKi

Do you ACTUALLY need an investment set up? Or have they told you that?!

The Guaranteed Growth plan is the 10% one (not the Return plan), and it's 6 years; if you touch your money earlier than that then you may get back less than you invested.

The 10% minimum guarantee is OVER 6 YEARS. Not 10% a year. You may well do better getting 3-6% each year by shifting between other accounts. In 6 years' time, 10% over 6 years might not look so great. Also, in 6 years' time the tax rules may change and you may not be able to benefit from ISA elements.

I don't understand these sentences fully, but make sure you do:
"The guarantee that you will receive the money you invested and the minimum return at maturity is provided by Santander Guarantee Company, a wholly owned direct subsidiary of Santander UK plc. Investors in the plan are exposed to Santander Guarantee Company’s ability to pay which is dependent on Santander UK plc and its subsidiaries continuing to be able to meet their financial obligations. The Investment Company will enter into financial transactions with Abbey National Treasury Services plc which are designed to generate the returns under the Plan. These financial transactions will not be secured. In relation to the two points listed immediately above, in the unlikely event that Santander UK plc was to collapse, you may lose some or all of your money."


I'm not saying don't invest. But I will question the wisdom of investing at such a low return over 6 years, which is a LONG time to fix your cash. Also, you will only be covered for £50K, so if Santander collapses you will not be entitled to anything more than that (your interest) - or ANY of it, if the above comment from Santander is anything to go by.

I wouldn't start investing until you fully understand the implications; investing isn't risk-free (unlike saving). The banks will promote their own products and are often paid commission for such accounts, so you're absolutely right to question it here. Don't rush into it!!

KiKi