A & L 12% Savings account

wheely

I've posted this in another thread but thought i'd start another under the specific title. I went into A&L today to open a current account and attached to the current account are 2 savings accounts...Premier Saver (instant access) and their Premier Regular Saver offering a whopping 12% AER. I'm quoting now from their website:

"Premier Regular Saver with an interest rate of 12.00% gross p.a./ AER is available to customers only at the time of opening a new Premier Current Account. To be eligible for Premier Regular Saver at a rate of 12.00% gross p.a./AER: applicants must not currently hold any A&L current account, and; applicants must not have held any A&L current account in the three months preceding a new Premier Current Account application. Minimum monthly payment £10, maximum monthly payment £250, for a maximum of 12 months. Interest is paid on maturity on the anniversary of the first payment due date. AER stands for Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded each year. Gross is the interest paid before tax. After 12 months the account will be closed and funds transferred to your Premier Current Account."

https://www.alliance-leicester.co.uk/savings/index.asp?page=prem-regular-saver&ct=savingshome

I know you lose the interest if you make a withdrawl but that doesnt worry me. Does this seem like a good deal?? Was going to dump £3k from my rubbish savings account into this over the period of a year. (I've already got my ISA set up for this year)

Any advice much appreciated

Arkad

It's the best regular savings account around in terms of the interest rate. As long as you're pretty sure that you won't need the money over the next 12 months, it makes perfect sense to max out on this every month and maximise your interest.

An alternative is the Lloyds TSB Monthly Saver. Only 8% interest rate but instant access and unlimited withdrawals with no penalties.

wheely

Thanks. Definitely wont need the money as I'm planning on buying a house with my girlfriend in about 2 years so just looking to make as much safe money on my capital as I can for now without looking at it too long term.

Kazza242

wheely wrote:

I know you lose the interest if you make a withdrawl but that doesnt worry me. Does this seem like a good deal?? Was going to dump £3k from my rubbish savings account into this over the period of a year. (I've already got my ISA set up for this year)

Any advice much appreciated

Don't forget that to qualify for the 12% regular saver rate, you have to deposit at least £500 per month into your A&L Premier Current account. You could route £250 of that to the regular saver and then transfer the other £250 back out to another account each month.

chesky369

I'm actually doing both the A+L and the Lloyds regular savers but I think the Lloyds is the best since it's for two years, as opposed to the normal one. Can't actually work out the precise end result though. Although 12% sounds wonderful, it's only really that on the first month's saving - after that, it descends so that the last month is one-twelfth of 12%.

Arkad

Although 12% sounds wonderful, it's only really that on the first month's saving - after that, it descends so that the last month is one-twelfth of 12%.

Apologies if I'm being thick chesky369 but why is that?

anticlaus105

Arkad wrote:

Apologies if I'm being thick chesky369 but why is that?

I think he/she means you earn 12% pa on all the money in the account. It's just that the last deposit can only be in for a max of 1 month hence only 1 month interest (or 1/12 of 12%) on the final payment in. It's only the first £250 that gets a full 12 months worth of 12%.

chesky369

You tend to think 'I'm paying in 3000 over the year' - what I'm saying is you don't get 12% on £3000 because it's stretched out over 12 months - it's actually around 6% in the end. still not bad though.

wheely

I was actually going to use the A&L account as my current account anyway so my salary is going in there. I've got savings with 1st Direct atthe moment that i use to fund a Halifax regular saver account...all a bit of a palaver...out of my savings, into my current, out to my Halifax account. Will probably move those savings to A&L's other savings account and do the same thing.

Kind of setting it up as a parachute account as I'm hunting down 1st Direct for my old bank charges!!

Arkad

Ahh, I see. Thanks for clearing that up.

However, if it starts out as a lump sum the interest on the 'feeder' account would be added too....if that makes sense.

wheely

Yes. So in theory. I'll be getting the interest on one savings account (albeit the funds in there will be reducing over 12months) whilst also getting the interest on the Regular Saver account. I hope! Just got to check that I dont lose all my interest on the other A&L account if i make withdrawls from it. If so, I'll have to find another savings account to put my lump some in that doesnt penalise me for making monthly withdrawls.

All a bit complicated but having come into some money recently from a house sale I'm finding it quite interesting keeping on top of all this and trying to make a few quid here and there.