Closing down an AA Savings (2.80%) account. Should I?

Nine_Lives

I have my money scattered about in ISAs, savings accounts & bank accounts.

I've already maxed out this years ISA, so the remaining money i'm saving this tax year went into a savings accounts...

I maxed out 1x Lloyds TSB Vantage account to £7k, but i didn't have enough to get £5,000 in my 2nd TSB Vantage account

....so the next best thing at the time seemed to be the AA Savings account. That was back in June.

I'm now at a point where the next deposit to my AA savings account will take me over £5,000 (the amount where Lloyds TSB Vantage pays 3.14%, thus beating the 2.80% from the AA).


Q1: Should i close the AA account or leave just £1 in it? As in, will i receive a big penalty if i close it (had something similar with Nationwide e-Savings)?

Q2: What happens to the interest i've earned between Jun & now? I'm hoping that's been earned & can't be effected now?


I can't see any gain out of staying with AA, but i'm just wo9ndering what happens to the interest i've accumulated (but haven't yet had paid to the account) & i'm not wanting to do anything that knackers up my chances of getting this interest (such as closing the account instead of leaving just £1 remaining in it for e.g. (if that would apply)).

Thanks.

ManAtHome

No penalties closing the AA account - they will credit interest to date when transferring the funds. Whether you close it or leave it open, you won't lose the interest - really a choice of getting it now or whenever it's credited (in 6 months time if left open?).

Bit confused by this "I'm now at a point where the next deposit to my AA savings account will take me over £5,000 (the amount where Lloyds TSB Vantage pays 3.14%, thus beating the 2.80% from the AA)" - did you mean that you're close to £5k in LTSB rather than the AA?

opinions4u

What happens if Lloyds cut their current account rates?

Leave £1 in The AA because you have an underlying bonus which is guaranteeing you a minimum rate.

(There's actually a case for opening a new AA account fairly soon. With Haliax having, according to another thread, just reduced their Web Saver Extra rate a little I would think there's a possibility that the AA bonus rate will reduce for new customers in the not too distant future as well).

Stompa

opinions4u wrote: »

There's actually a case for opening a new AA account fairly soon.

If you want one, you'll need to act quickly:

https://www.emoneyfacts.co.uk/news/savings-news.aspx?newsarticleid=199874

Nine_Lives

M.A.H. - What i mean by that, is that i have approx £4,600 in my AA savings right now gaining 2.80%. The only time Lloyds TSB beats that is when you have a balance of 5-7k & they provide 3.14%. I keep a balance of 1k on my Halifax current account card for "just in case" purposes. If i ever need to withdraw an amount, it's there. Anything above the 1k gets transferred to my savings account (currently AA). I've been away for a while so i have about £500 to transfer across, which added to the £4,600 in the AA savings at the moment, makes £5,100 (qualifying me for Lloyds TSB's 3.14% with their Vantage). That's what i was meaning

O4U - I thought you could only have 1 AA savings account at a time? I think i applied for it early in the year, but only made my opening deposit in June (so from this i assume any 12month bonus rate will run until June 2011 for me?). You do make a good point for leaving £1 in there though, as it's only £1 after all to keep it open.

Stompa - as above, i was lead to believe you could only have 1 AA savings account at 1 time? And as that link says it's withdrawn tomorrow, does that mean if an application goes in today you're ok? Or does any application need to be approved by 1st Nov?

I also notice it says Issue 3. I can't find my papers at the moment, but i'm sure when i opened my AA Savings account back earlier in the year it said Issue 2??

noh

Lloyds Classic with Vantage currently pays 4% gross if your balance is between £5k and £7K.

There is no stated limit to the number of AA Internet Extra 3 accounts you can have.

The Internet Extra 3 paying 2.8% gross was launched on 11th March 2010.
If you applied before that it is an Internet Extra 2 which pays 3.0% gross.

http://www.theaa.com/savings/rates.html

If you are an existing customer and you apply online your new account will normally be set up immediately.

xrjtg

Just in case it's slipped past anyone, you only need £10k total before the Lloyds Vantage is better than hybrid Vantage/AA.

psychic_teabag

According to http://www.theaa.com/savings/rates.html issue-2 account is paying 3% so I'd hang onto that.

Stompa

K_P83 wrote: »

Stompa - as above, i was lead to believe you could only have 1 AA savings account at 1 time?

Well I have an Issue 1, and I opened an Issue 3 last week as soon as I became aware that the account was going to be pulled. They've not objected and I now have both accounts up and running.

K_P83 wrote: »

And as that link says it's withdrawn tomorrow, does that mean if an application goes in today you're ok? Or does any application need to be approved by 1st Nov?

That's a question for the AA I think.

Nine_Lives

noh - when i put 3.14% i meant net. My AA account must be issue 2 then as when i log in, it says i'm getting 2.8%. I'm sure i applied before that though. Then again, i had the forms for quite some time before i made my initial deposit in June, so i guess that's where i came up short.

xrjtg - bit of a d'oh moment for me. I could've dropped my 1st account with TSB from 7k to 5k & then i could've transferred from AA to TSB 2k's-worth of savings ago.

It's going to be some time before i max out both Lloyds TSB accounts though. We'll probably be close to a new tax year by then, which means the ISA limit will be getting maxed out (supplied by 1 of my Vantage accounts).

calypso_rhapsody

Am just looking at the Lloyds Vantage accounts - is there no problem with having multiple accounts? 4% gross is a pretty attractive rate .....