Natwest/RBS 2.85% esaver

Baldur

alanq wrote: »

A Nationwide card reader can be used for NatWest and vice versa with the correct cards. However, the procedures are a little different. (e.g. NatWest uses the Respond button whereas Nationwide uses the Sign button.)
http://www.natwest.com/microsites/global/cardreader_demo/online_demo.htm

As does the Tesco card reader (probably the same as that issued by RBS/Natwest), the point of the link was merely to demonstrate what card readers are (in general) to a poster who clearly had not come across them before.

rb10

oldfella wrote: »

I am sure NW will maintain that the AER is correct for the duration of the bonus period - I guess they reckon its up to us to work out when the bonus period is

The British Bankers' Association doesn't agree that what they are doing here is fair ... below are some quotes from this page on their website. The point of the AER is that the banks do the work of making comparisons between accounts simple and transparent, and it's not left to us to work out when the bonus period is and how this affects our interest rate.

7. Where interest rates are advertised, these must be described as follows:
[...]
d. Z% Annual Equivalent Rate ("AER")

where:
[...]
d. is a notional rate which illustrates the contractual interest rate (excluding any conditional bonus payable) as if paid and compounded on an annual basis. An explanatory phrase conveying this meaning must be used in conjunction with this expression. Any assumptions made in calculating the rate should be stated.

The fact that their advertised AER only applies if the account is opened on the 15th of any month is surely an assumption that should, according to the above, be stated.

The AER is a truly reflective rate

Natwest's "AER" is not truly reflective, as if you open an account today, in a year's time you will not have earnt 2.89%.

11.

a. Accounts which advertise a bonus rate of interest, payable for a specific period, must ensure that the duration of the bonus is clearly stated in the main part of the advertisement

The main part of the advertisement states "Includes a bonus of 1.85% Gross for the first 12 months" which appears to be incorrect (it's not paid for the first 12 months, but for a different 12 month period), so Natwest have failed on this point as well.

The BBA goes on to clarify this point ...

This provision ensures that bonuses are explained clearly. The duration of that bonus rate must be clearly stated in the main part of the advertisement, and not in the footnotes.

They also say that ...

If a bonus rate is payable until a fixed date (for example, "payable until 1 December 2003" and the product is launched on 1 May 2003), the AER will change over the period. The AER at the time of the product launch will be higher than that towards the end of the bonus period. This gives rise to scope for the AER to be misleading if it is not recalculated on a regular basis.

... which is what Halifax did a couple of years ago on one of their Websaver accounts (from memory, I think they had a PDF on their website showing how the AER was different for every single day, e.g. x% AER if you opened your account on 1st June, y% AER if you opened it on 2nd June, etc) and Nationwide are currently doing similar on their e-ISA. Although Natwest's account is slightly different to this, it would surely be fair to take this as best practice where the AER varies depending on when the account is opened, and act in this way.

D1zzy

Thank rb10 for that - comforting to know I'm not yet a total idiot after all

alanq

rb10 wrote: »

The fact that their advertised AER only applies if the account is opened on the 15th of any month is surely an assumption that should, according to the above, be stated.

No. If you open the account on the 15th of a month the bonus earned from the 15th of the following month.

The Important Information document states that "the gross and AER rates are applicable from the start date of the bonus".

So it seems that we do get 12 months at a higher rate just not the first 12 months!

Not clear and not prominent I agree.

D1zzy

alanq wrote: »

No. If you open the account on the 15th of a month the bonus earned from the 15th of the following month.

The Important Information document states that "the gross and AER rates are applicable from the start date of the bonus".

So it seems that we do get 12 months at a higher rate just not the first 12 months!

Not clear and not prominent I agree.

But the fact that you have to have a balance on the account for potentially 6 weeks before the bonus kicks in is at the very least misleading. Ok, the financially aware will stick in a £1 and try and open on the last day of the month, but most people will probably just open the account and stick in whatever savings they have, which will then spend up to 6 weeks earning 1%.

Its the same trick that NW use with their fixed rate accounts where they require you to put money in before a "start date" and during that time it earns less than base rate. If you factor that "pre- start" rate into their quoted rate for the account, their quoted rate is significantly reduced.:(

miller

I put a cheque for a quid in with the signed application form and it has been cashed (even though they didn't ask for it on their checklist on page 2).

So for most people its likely 15th Nov is the relevant date for "farming the bonus". I would have thought only a handful of existing NatWest customers could potentially have opened the account in September (in which case 15th Oct is the relevant date).

Personally, I think anyone who has already deposited funds would have a good chance with the Ombudsman of getting this paid for the first 12 months as it "clearly" states on the website.

SnowMan

D1zzy wrote: »

But the fact that you have to have a balance on the account for potentially 6 weeks before the bonus kicks in is at the very least misleading. Ok, the financially aware will stick in a £1 and try and open on the last day of the month, but most people will probably just open the account and stick in whatever savings they have, which will then spend up to 6 weeks earning 1%.

Its the same trick that NW use with their fixed rate accounts where they require you to put money in before a "start date" and during that time it earns less than base rate. If you factor that "pre- start" rate into their quoted rate for the account, their quoted rate is significantly reduced.:(

I don't think the 2 to 6 week wait for the bonus is good

But what is truly appalling are the lies on the Nat West website. I use the word lie deliberately as I (and probably others) have pointed out to Nat West (I have kept a copy of the transcript of the web chat) that they have incorrect information on their website and still they have done nothing about it.

As you point out it says "Get a bonus of 1.85% Gross for 12 months from account opening" when you go to the personal savings page and then "Includes a bonus of 1.85% Gross for the first 12 months" in the main account section. Both are factually incorrect and it is only hidden well away in the common questions that the delay in bonus is mentioned.

The account is in the best buy tables in my paper this morning and people will go to the website and believe what they read that the bonus is for the first 12 months and get stung.

miller

From http://www.natwest.com/global/customer-charter.ashx

4. We will help you to make the right choices for you and your money, providing a clear product range with simply explained features and charges

I'd hate to see what complicated looked like.

alanq

D1zzy wrote: »

Its the same trick that NW use with their fixed rate accounts where they require you to put money in before a "start date" and during that time it earns less than base rate. If you factor that "pre- start" rate into their quoted rate for the account, their quoted rate is significantly reduced.:(

Is there something else we should be told? The website says

"Initial rate – Any deposits made before 29 November 2010 (i.e. before the start date of the Bond) will attract a rate equivalent to Bank of England Base Rate p.a. until 29 November 2010."

However, I agree that paying base rate for a couple of months is a sneaky way of seeming to offer more attractive rates than are in fact the case.

alanq

It's good that the MSE article inlcudes a caveate about the bonus not starting immediately. However, it states
"Confusingly the bonus element is earned from the 15th day of the month after you applied, ..."

That should read "after your account is opened". (Even "opened" could have a number of different definitions.)

http://www.moneysavingexpert.com/savings/savings-accounts-best-interest#bestbuys