Wanted - High Interest Account

Debt_Free_Chick

I think that the old idea of a "high interest" account has long gone. It used to be the case that if you had, say £25,000, to deposit you could get an extra 1-2%. No more ...

When you look at all these "good" account with an attractive headline rate, look at the AER ... ignore the headline rate. That generally only applies to the first month's deposit and it's generally a limited amount e.g. Halifax 8%, but only applies to the first month's saving, which is limited to £250!

The good uns have already been covered ... ING, Alliance & Leicester ... but I would add Bradford Bingley at (IIRC) 5.4%. Alliance & Leicester has a maximum deposit of £25K (online saver account).

Steve_xx

"When you look at all these "good" account with an attractive headline rate, look at the AER ... ignore the headline rate. That generally only applies to the first month's deposit and it's generally a limited amount e.g. Halifax 8%, but only applies to the first month's saving, which is limited to £250!"

Halifax's rate is 7% gross/aer, not 8%. As I read it, it applies to the whole amount invested, not just the first months investment. Have I missed something here? If so, could you please explain how you have concluded that the 7% is only payable on the first months contribution?

Debt_Free_Chick

Steve_xx wrote:

"When you look at all these "good" account with an attractive headline rate, look at the AER ... ignore the headline rate. That generally only applies to the first month's deposit and it's generally a limited amount e.g. Halifax 8%, but only applies to the first month's saving, which is limited to £250!"

Halifax's rate is 7% gross/aer, not 8%. As I read it, it applies to the whole amount invested, not just the first months investment. Have I missed something here? If so, could you please explain how you have concluded that the 7% is only payable on the first months contribution?

Sorry, I wasn't very clear. After 12 months, the first month's savings amount gets the whole 12 months interest, the second months amount only gets 11 months interest, the third gets 10 months interest etc.....

Steve_xx

Debt_Free_Chick wrote:

Sorry, I wasn't very clear. After 12 months, the first month's savings amount gets the whole 12 months interest, the second months amount only gets 11 months interest, the third gets 10 months interest etc.....

Oh yes.....I understand that, but then that's no different from any other type of account, ie you start earning interest from the day after you deposit the money.

The good thing is that there are a number of these 'regular saver' types of accounts around these days. Therefore it makes sense to open an account at each bank who launch one.